Apr 17 – STT Trade Update

Last week was somewhat interesting re how volatility and vol skew can have an affect on trades. The P/L on my trades halved from Apr 6 to Apr 12 and the market had moved a whole 8 points during that time. Almost NIL. However, the volatility increased and the skew changed as well causing my way OTM options that I am a net-seller on to retain or gain in value with-out the help of a similar increase in the debit spreads (closer ITM). I found that quite neat, it’s not often you see such an increase in vol and change in vol skew without a corresponding down move. These types of things are fairly temporary and had we had a real down move, the debit spreads would have activated more. It’s an affect that occurs when there’s some binary events, or very low odd but genuine worry of tail risks (i.e. NK and Syria uncertainty) and probably the biggest reason, the French elections.

I don’t really follow market technicals as much as I used to. I had several sources and was fairly in tune with the market, though for some reason, I’d never use it for trading πŸ™‚ I was mainly trading Rhinos which was incredibly frustrating for the last 14 months as most of you who trade that can attest. We’ve had a never ending up move from the Feb 9, 2016 lows (I think close to 45% on the RUT). The trade suffers in any cycle that has a 5%+ up move and that was 10 of the 14 previous months. The moves were pretty insane, I remember during the Brexit event, my balance increased 300k only to dwindle to half that in 2 days. That was the only time the market went down a modest amount and allowed my matured Rhinos to finally profit. I was struggling adjusting on the downside only to have the market scream against and rally until pretty much Feb of 2017. From that Brexit event, the rhino trade was a struggle.

The STT trades are the opposite, they’re quite docile. I had to get away from intra-day trading, as I’d stare at my risk profiles, do analysis and be like huh-ok, nothing to do..what am I supposed to do with my time now? Trading has become boring, I guess I’ve arrived πŸ™‚

Here is my June STT trade

This is a 108 unit trade. I’ve got 4 other Junes. It doesn’t include the BSHs which are not fully financed and do rely on some of the P/L here to finance.

Here is my JUL STT Trade

This is a 45 unit trade. Most of its value is stuck in it as we await the French elections

5 thoughts on “Apr 17 – STT Trade Update”

    1. omg. wtf. Dan? It’s been like 20 years. How’d you find this site??

      How are things? Are you in Fla still or back in Canada? I’ll try emailing you at the email attached.

    2. I remember taking apart both of our 486s to get one supped up with more ram to play Doom. Then the panic that ensued when we couldn’t get yours to boot up again……good times.

  1. Great blog. Re your profit/loss targets, per tranche it seems that you’re aiming for 3800/5700. Thats a factor of 10 higher then what is in the guidelines. Is your 108 unit size actually 1080 units?
    Thanks and look forward to reading more.

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