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Post by Del »

sweetandsour wrote: 28 May 2023, 07:14
Del wrote: 27 May 2023, 19:00
sweetandsour wrote: 27 May 2023, 18:03

I just read that a deal has been struck. Now, what's gonna happen this coming Tues morning? I feel a need to buy SPY in the pre-market.
Good luck. I hope my XLE does some uppity action.

I have some room for exuberance in my condor on SPX that expires on Friday. But not too much. My upper limit is just 4300.

My condor on RUT expires Wednesday. I have plenty of room there, unless the market goes bonkers.

The market shouldn't be too exuberant, I think. Nothing has changed in the real world.
Yes, and some were saying that last week's market already reflected an expected debt limit resolution. But who knows what the emotional market will do, even if momentary.
Re options, I got away from my study for a while; it seems like just too much risk for a small account like mine. Especially these iron condors that you like to do. We'll see, though, what happens this summer. Good luck on your positions.
Futures on SPX and RUT opened 5 pm Sunday night, as usual. (Futures have different market schedule than stocks. They are weird around holidays.) Anyhow, opened just slightly above Friday close, and hovering thus for the last four hours. There is no early exuberance around the debt ceiling deal.
=================================

I'm very happy that you've taken some time to investigate cash flow trading with credit spreads and condors. I don't think that every trader should do this, but I firmly believe that every trader deserves to know about it.

I paid money for a year-long for a year-long weekly seminar with a web instructor. We lived with the market in real time, and discussed how to adjust trades under real conditions. It's easy to set up these trades, but the real money comes in how to cut your losses when the trade goes against you. Without this skill, as you wisely say, the trades are much too risky.

Even after the year-long course, I still lost money for a while. The instructor could teach me techniques for dealing with situations, but he couldn't possibly teach me how to deal with my own fears and emotions. And even after a full year of paper-trading, it's just different with real money. I persevered because I knew it could work... but it wasn't painless.

I started this year with $55k. I have made $38k in condors. That's 69% YTD, and less than 6 months into the year. 100%/year returns are normal. Double your money.

But I have lost $16k in stock trades, mostly because I sold XLE at the bottom and waited to get back in. Currently at just $77k.

I still suck at basic delta trades on stock and ETF's. You and your mentors seem to be having success and income from this. For my part, I'm accumulating some buy-&-hold positions in XLE and XLK, selling covered calls when conditions are fortuitous. Also selling puts when I have cash to accumulate more. I just don't have the skills to predict and profit from short-term delta trades. It can be learned, and I must must learn when to buy and when to sell short.

I am in the paradoxical situation of profiting from stupidly complex trades while losing at stupidly simple trades. This is funny stuff! You might be my only friend who gets the joke.

Every trader needs to cultivate his own style. And then add styles to his repertoire, in order to thrive in any market. We could even support our families on this, if we were younger. It's hard to profit from the wisdom of age.

Buy-&-hold strategy makes over 10% per year, on the average, and we are in a way-below-average market return under Biden's regime. I'll do very well when he's fired. I will add normal 10+% market growth, plus using margin equity as collateral to support cash-flow option trades which could provide 100
% return on principal.

My realistic goal is $50K/year supplement to our retirement income, which could trigger as soon as June of next year.

I'm coming to visit you, and you deserve a special gift that will last a long while. A case of fine Scotch or bourbon, or some such. Start thinking about what you really enjoy. You started this thread, and I firmly believe this sharing has been a great financial benefit to my family. I tithe on it. I want to share some of this with you.

I'm going to make $1000/year on JEPI alone, which you recommended. So humbly endure a gift from me. And let's plan a meet-up.
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I bought a lot of 100 XLK today at 164.7. I want to hold it and sell a covered call.

I want to sell 200 XLE at a decent (currently 76.6 is too low) and sell successive puts until I can buy another 100 XLK. I'm selling some calls a bit close to the money and likely to get called out eventually.

I'll then have about $32K in energy and in tech. Tech seems to be doing well during the AI boom, while energy is waiting for Biden to get fired.

I will just hold these and let them appreciate at their own pace.

Condors are doing well. My position in RUT expires today, securing $1133 (on $9000 at risk).

I put another position on yesterday ($1475 premium on $9000 at risk). At the low point in RUT today, I was able to add $397 (on $5000 at risk). If RUT surges upward, I might be able to add more. Anyhow, looking to add $1872 to my cash pile while I wait for XLE and XLK to turn up.

This is fun. My trading balance is still hovering at $78,000. New cash is keeping up with the downturn in XLE.
=============================

I have discerned a major turn in my family's finances.

I am going to start drawing $700 per month from my trading account to balance our monthly budget. Basically, bring cash from the trading account to build up the local family savings account, so there is cash to do stuff that my wife wants to do.

$700 is not going to change anyone's life. But this is the start of something big. And months ahead of schedule.

Meanwhile, SPX is exactly flat from its position one year ago. I am up ~70%, YOY. I pat myself on the back.
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Post by sweetandsour »

XLK and other AI and chip stocks were ok until China mouthed off yesterday.

There should be some good buys this morning, but I'll be on the golf course.
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sweetandsour wrote: 31 May 2023, 23:59 XLK and other AI and chip stocks were ok until China mouthed off yesterday.

There should be some good buys this morning, but I'll be on the golf course.
It didn't play out that way. Some news (I don't know what yet) hit the market at 9:30, and everything reacted favorably. Especially XLE.
Even TARGET (TGT) is sporting a white candle (although still below yesterday's close).

I've been waiting for a surge like this to sell some calls on XLE and XLK.

I also set up my next monthly condor on SPX for June.

At the moment, my account stands at $81K.... counting all my eggses before they hatches, I am. It will likely sell off some by the end of the day, and perhaps tomorrow (Friday) as well. But still, an encouraging new high-water mark.
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Post by Del »

Senate passed the compromise budget/debt ceiling bill. As Biden has already agreed to sign it (as soon as he can find his pants), the immediate crisis is averted.

Mr. Market is enjoying a bit of exuberance and tacking into the headwinds.

WTI is recovering some lost ground. Perhaps the world market hopes Biden will buy some crude to replenish the SPR. That would be a smart thing to do, so fat chance of this.

XLE is boisterous.

Meanwhile, SPX is tickling the upper border on my iron condor that expires today. Currently at 4278 and rising. Let's put on our stomping boots and see that it closes below 4300.
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Post by Del »

sweetandsour wrote: 31 May 2023, 23:59ping
Del wrote: 02 Jun 2023, 08:05 Meanwhile, SPX is tickling the upper border on my iron condor that expires today. Currently at 4278 and rising. Let's put on our stomping boots and see that it closes below 4300.
Phew! We've been stomping all day. I owe you a new pair of boots!

SPX got to almost 4291, and that's way too close. But I knew we could do it. We are expert traders!

The $2824 premium on that condor is now secure.
=========================================
I was so hyper-focused on stomping down SPX, I totally overlooked the opportunity to add some safe money to my condor on RUT that expires Wednesday. That was a real-word mistake caused by my emotional attachment to SPX (over which I had no control). I missed out on $300 to $400 here. An expensive lesson.
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Post by sweetandsour »

Our internet has been down since Thursday evening, and I missed the whole thing. And I saw it (the rally) coming, too.
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sweetandsour wrote: 03 Jun 2023, 08:03 Our internet has been down since Thursday evening, and I missed the whole thing. And I saw it (the rally) coming, too.
I did well on my positions in XLK and especially XLE.

Turns out that the market rally was powered by the latest jobs data.
Market expected 193K new jobs. Turns out 339K new jobs were created. More than 50% over estimate.

Mr. Market took this as a sign that our economy is still growing; no sign of recession in sight. Investors started buying everything in sight. Even TARGET and Anheuser-Busch saw white candles.

This is bad news for inflation, though. Job market is still tight and needing workers to fill those jobs.

Several economists weighing in on what this will mean:
May jobs report shocks economists: 'The strangest employment report for some time'

Summary:
Economy is still hot and labor market is tighter than expected.
FED fears wage increases, triggering a wage/price spiral.
Inflation is still well above FED's target rate of 2%.
May CPI inflation data drops on June 13.
FED meeting to set rates is June 13-14.

FED may increase rates in June, or pause and talk about likelihood of raising rates in July. (My positions would welcome some scary news.)

Market will likely wake up Monday feeling cautious and consolidating this week. Actually, I am depending on it.

My monthly condor on SPX is already uncomfortably close to the top side, with a full four weeks to go. I should just plan on making a defensive adjustment during the next pull-back.
============================================

I have some trades set to maybe trigger in the opening moments of RUT, if there is any exuberance left. Still kicking myself for missing on Friday's exuberance and a weekend of free theta. I will not make this mistake again.

I will be noting Sunday evening opening of market futures with great interest.
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Post by Del »

OPEC announced that they are cutting production some more, giving a boost to WTI and XLE.

Markets opened even with Friday's close. I was able to sell some more credit spread on RUT outside and above my current condor. This still safe money, just not as safe and/or not as much as I could have made on Friday. Still, I got my $342 on contracts that will expire Wednesday, so I don't feel bad. RUT started dropping right after my orders filled, so actually I feel pretty good.

I'm monkeying with my condor on SPX that expires June 30. I don't want to get clobbered by any exuberance after the CPI & FED results that will drop June 13, 14. I put the new, safe position on this morning when market opened. I will wait until SPX drops to support (around 4425) to close the dangerous position. Just maybe I'll break even on the roll.
=========================

Hmmmm.... it's 9:10 am. XLE has already closed the gap and fallen below Friday's close from this morning's exuberance over the OPEC news. WTI also dropping over the last 1.5 hours. I wonder what's up?
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Post by sweetandsour »

Del wrote: 05 Jun 2023, 07:53 OPEC announced that they are cutting production some more, giving a boost to WTI and XLE.

Markets opened even with Friday's close. I was able to sell some more credit spread on RUT outside and above my current condor. This still safe money, just not as safe and/or not as much as I could have made on Friday. Still, I got my $342 on contracts that will expire Wednesday, so I don't feel bad. RUT started dropping right after my orders filled, so actually I feel pretty good.

I'm monkeying with my condor on SPX that expires June 30. I don't want to get clobbered by any exuberance after the CPI & FED results that will drop June 13, 14. I put the new, safe position on this morning when market opened. I will wait until SPX drops to support (around 4425) to close the dangerous position. Just maybe I'll break even on the roll.
=========================

Hmmmm.... it's 9:10 am. XLE has already closed the gap and fallen below Friday's close from this morning's exuberance over the OPEC news. WTI also dropping over the last 1.5 hours. I wonder what's up?
OPEC is continuing their production cuts. Meanwhile, crude, gasoline and distillates inventories in the US rose last week, while rig counts decreased.

I was watching Chevron today, which opened at 158 and closed at 155. They're buying PDC Energy, and also are buying back stock, and raising their dividend.
The Indians will not bother you now, on account of ... you are touched.
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