Solid day of profits! Finally – the market moved in the direction I was anticipating.
In my actively managed accounts – including other people’s money — I was able to generate between $5k – $20k in each of maybe 6 or 7 managed accounts – totaling $50k+ in profits today – that’s on top of $30k in the past two days. But the prior 10 days when the market wasn’t moving there was no profit – but instead a slight loss of maybe $10k.
And that’s with me exiting too early in both the S&P short as well as the silver long!
In fact at around 1pm – I called it a day and just went out to celebrate — and of course when I do that, the markets just take an even bigger leg down that I largely missed other than a small remaining position.
But I’m not going to give myself FOMO (fear of missing) – when it comes to bazooka option trades – it’s critical for me to take profits when I can and keep position sizes manageable – as key is not to give back those profits.
Our trade alert was for the SPY Aug 18’17 248 put – up 200%. Previously we were in a historically low volatility environment – so options were cheap – when volatility expands and the market drops a look, these 100%+ returns are possible.
The market was previously stuck for a while – but when the market finally moved – it really moved — even beyond what I expected.
I’ve found that when the markets are stuck – that’s when I lose the most money — either due to time decay or due multiple intraday reversals and fake breakouts / breakdowns.
If I can just avoid churning when the markets are not moving – and be super patient for the days when the market does move and only bring out my big bazooka options during those times – I should be able to avoid losses more effectively.
Easier said than done – but I’m actively conscious of doing this.
I’m actually more proud of myself for not churning in the prior 10 days and waiting super patiently for the market to make a move.
Making money is not the hard part — avoiding losses is the hard part for long term success.
So I’m happy I was able to avoid large losses when the market was stuck — which is what I’ve done in the past.
Patience pays off – was looking for a drop
The S&P fell as low as 2433 ES — so definitely exited too early
Additionally, our alert on USLV – the 3x ETF for silver – was perfectly timed – as we entered when silver was in the 16.10 to 16.20 region – since then it has rocketed over 17.00
Here’s a screenshot of our trade alert acct – previously hovering around the $25k mark a few weeks ago, now touching 27k.
Previously we described the spike up as a potential blowoff top. While we dropped towards 2460 – we did bounce all the way back to 2474 into the close yesterday – which offered the ideal place to buy puts after the market close.
I missed out on buying IWM puts – definitely weaker than I anticipated.
In our July 26 post, (it was a Fed Wednesday) =we said:
The russell may have completed 5 waves and started a ove down. There should be a small bounce overnight.
It looks like that statement was accurate – as after the small bounce – the Russell has continuously gone down.
I have a small separate account dedicated to following the Warren Buffet strategy of investing index funds. I sort of violated the rule by exiting my IWM position on July 26 – looks like it was a good sell on that day in hindsight. I do hope to find a place to re-enter IWM in the fall.
The drop in the Dow is tiny compared to the other indices.
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