Re: New to group / Intro


Sep 24, 2014

 


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#1613 Sep 24, 2014

Hi all - Thanks so much for accepting me into this group. ��I've been trading options for only about 18 months and have yet to find a system that works��perfectly for me. ��I am intrigued by Karen's strategy and I am especially interested in��her ability to manage risk and move positions around, something which seems to set her apart from others. ��I am currently trading weekly SPX Iron Condors but am considering a switch to naked��options, Karen-style, as it seems from reading through these threads, that some people��here with this strategy get a pretty good night's sleep :). ��

I am very interested in the management of large drops and the IV expansion that accompanies. ��These Weeklys seem to be��very susceptible to big moves, especially early in the week, and I'd like to work on reducing that risk -- though, ironically, the only negative weeks I've had are with big upswings, not drops.

Karen used to leg into Iron Condors and I've used those early interviews to work out my own system, incorporating a lot of Karen's philosophies. I've done this for five months now. Here are the basic guidelines:- Trade Weekly SPX Iron Condors exclusively- Enter trade with about 8dte. Sometimes even Monday (5dte) or Tuesday (4dte)- Selling into strength, legging in based on market direction

- I look for a .20-30 cent spread @ 4-6 Delta (this is for one side, so .40-.60 for the full��Condor), but no closer than 40pts away from current price on the upside and 60 on the downside.- I will buyback the put side @ .5 if poss. to reduce risk, but let the call side expire��worthless.- My goal has been to earn at least 2% weekly using 30% of the portfolio, though I've��averaged closer to 4.5% weekly. ��This is an average based on trading in 5 accounts of��various sizes on a weekly basis for 5 months.

This system works great when at extreme ends of the channel, esp. on the call side, but a few weeks ago, I placed calls that were within these parameters, but was unaware of where the SPX was within the channel, and it was about to make a long climb upward (this was mid-August). ��My spread went from .40 to 4.00 in two days and, combined with an inconvenient occurrence of life happening, I was unable to stay ahead of the run-up... or, more plainly put, freaked at the P/L and made some very poor choices. ��Ironically, if I had just been patient, it all would have settled back down and my loss would have been minimal.

I have taken to reading charts, learning more about general market patterns and re-thinking the general strategy since then and am wondering whether moving a few months out with my options wouldn't be a better plan. ��Right now, my profit is obtained from premium, not theta, and I am interested in how that would work.��

I only have one trade/IC on at a time, with a small overlap on Fridays, but when collecting theta and going out 50 days, you have multiple positions at once, correct? ��Do most of you put on new trades every week? ��Every month? ��And for those of you with several accounts, do you ever find it difficult to manage all the trades?

Thanks again for adding me and I look forward to learning from everyone.



Deeji



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#1614 Sep 24, 2014

Welcome Deeji.. You mentioned you use a channel and trade into strength.. I too take the same approach.. Can you please expand on the type of channel you use (time frame, indicator name, indicator settings, and conditions you look for as points of entry based on that channel)LawrenceOn Sep 24, 2014 1:41 PM, "jedimunkey@... [supertraderkarenstudy]" supertraderkarenstudy@yahoogroups.com> wrote:

.Hi all - Thanks so much for accepting me into this group.. I've been trading options for only about 18 months and have yet to find a system that works.perfectly for me.. I am intrigued by Karen's strategy and I am especially interested in.her ability to manage risk and move positions around, something which seems to set her apart from others. .I am currently trading weekly SPX Iron Condors but am considering a switch to naked.options, Karen-style, as it seems from reading through these threads, that some people.here with this strategy get a pretty good night's sleep :). .

I am very interested in the management of large drops and the IV expansion that accompanies.. These Weeklys seem to be.very susceptible to big moves, especially early in the week, and I'd like to work on reducing that risk -- though, ironically, the only negative weeks I've had are with big upswings, not drops.

Karen used to leg into Iron Condors and I've used those early interviews to work out my own system, incorporating a lot of Karen's philosophies. I've done this for five months now. Here are the basic guidelines:- Trade Weekly SPX Iron Condors exclusively- Enter trade with about 8dte. Sometimes even Monday (5dte) or Tuesday (4dte)- Selling into strength, legging in based on market direction

- I look for a .20-30 cent spread @ 4-6 Delta (this is for one side, so .40-.60 for the full.Condor), but no closer than 40pts away from current price on the upside and 60 on the downside.- I will buyback the put side @ .5 if poss. to reduce risk, but let the call side expire.worthless.- My goal has been to earn at least 2% weekly using 30% of the portfolio, though I've.averaged closer to 4.5% weekly.. This is an average based on trading in 5 accounts of.various sizes on a weekly basis for 5 months.

This system works great when at extreme ends of the channel, esp. on the call side, but a few weeks ago, I placed calls that were within these parameters, but was unaware of where the SPX was within the channel, and it was about to make a long climb upward (this was mid-August).. My spread went from .40 to 4.00 in two days and, combined with an inconvenient occurrence of life happening, I was unable to stay ahead of the run-up... or, more plainly put, freaked at the P/L and made some very poor choices.. Ironically, if I had just been patient, it all would have settled back down and my loss would have been minimal.

I have taken to reading charts, learning more about general market patterns and re-thinking the general strategy since then and am wondering whether moving a few months out with my options wouldn't be a better plan.. Right now, my profit is obtained from premium, not theta, and I am interested in how that would work..

I only have one trade/IC on at a time, with a small overlap on Fridays, but when collecting theta and going out 50 days, you have multiple positions at once, correct?. Do most of you put on new trades every week?. Every month? .And for those of you with several accounts, do you ever find it difficult to manage all the trades?

Thanks again for adding me and I look forward to learning from everyone.



Deeji







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#1619 Sep 24, 2014

Hi Lawrence,

I just use your basic Linear Regression 50 and 100 channels.

To me, it's a good indicator of when the SPX is overbought or oversold - at least for the last two years when it's been on this very defined and consistent angle. ��I'm comfortable buying a closer call spread and receiving more premium when it's near the top 100 line, but am still cautious at the bottom as I'm never sure if it will keep dropping.

I've only recently been exploring the various charts and figuring which are good predictors. ��What do you use?

Deeji



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