Credit Spreads for Consistent Profit in Small Accounts

Week ending 5/12

The trade plan and rules have developed into something better. Experience teaches a better way in some cases.

-I am not afraid of earnings. In fact have needed to thrive on them to get any action.

-The profit taking limit is now 50%.

-Strike selection is still the same, but the short strike is no longer a stop loss. Losing trades still benefit from normal option decay, so it makes sense to keep them on, and you might even get a reversal that brings back some profit.

The FXE trade worked perfectly. The election outcome was not the most advantageous, but that thing was so inflated for the news that it had no choice but to drop. Looks like it will be a slower week. IV bumping all time lows and earnings season is winding down. The catalyst for IV is leaving. Fortunately PCLN was a gem this week with multiple very fast profits concluded with nailing the earnings outcome. Logged the best week yet and really only traded one stock. To wrap things up I took a chance on SNAP with its first earnings announcement since IPO. What a bust! The silver lining is that we get to see what happens when you hold one of these losers. Right in the last minutes of the week I decided to throw on some trades for companies that have earnings next week (week ending 5/19) that are directional for a ramp up to the earnings day. I can make money by the stock going up, and if it does not, then I leave the positions for the IV crush on earnings day. I may roll those to longer dates if I do not take profit before their announcements. Also I decided to take a hedge on QQQ against my plethora of long positions. I am looking into how I may create these hedges with more favor in terms of theta decay, calendar spread or put debit spread? I will be making more effort in the future to maintain 5-10 positions. Part of obtaining statistical norms is that you need sufficient occurrences. It is necessary to trade small and often to achieve desired statistical outcomes.

To date I have used two basic strategies

-Single option buy

-Vertical credit spread sell

I will look to add two new strategies in the coming weeks. Look for those in future posts.

You will begin to see a statistics chart on posts, that simply show performance. I am supposed to be profitable and carry around an 84% win

5-12 a

Closed Trades

5-12b

Open trades

5-12c

Statistics

5-12d

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