Whirlwind month of Jul (Travels, HS3, STT, Rhino etc)

Finally settling down and getting back to normal work lifestyle rather than scurried catch-up.

Just finished a 24 day cruise, then traveled to Arona, Italy for some R&R with family friends then onwards to meet my biggest client (a well known Ferrari racer/entrepreneur socialite type guy who’s got the fastest lifestyle I’ve ever seen) in Budapest which consisted of me trying to balance 2 kids, a baby, an “at the end of her rope” wife while staying out to 3:30am for business (and some pleasure). I barely could keep up with anything. After that I made my way by rental van to Zadar, Croatia where I caught up. We just left and made it to Istria, Croatia and now I am in a villa in the countryside relaxing and catching up on everything.

During these little whirlwind periods, I have to balance everything which can be difficult but I think I have it down to a science. My communication usually suffers, emails that aren’t super important sometimes get forgotten but everything else is generally aces. One of the reasons I travel to Europe during the summer instead of elsewhere is because of the timezone, i.e. the market opens at 330pm here so I get the evenings to attend to trading.

My mind is always focused on the trades during every single day regardless of where I am, or what tours I might be on or if we’re on the road. I generally don’t miss a beat on the management of these trades and finding opportunities for entry and adjustment.

I usually wake up every day, model my trades, look at the market technicals, figure out what I need to do later, enter trades in IB/EDF and pause them for market open. I then get out for the day with the family and do whatever we may have planned. We have a small baby now so we have to usually be back for 12-1pm for nap time. I use that to further catch up and usually do some backtesting or whatever else I have to do for market open. Then at about 2:30-3pm my wife and I will typically head out for some alone time for about 3 hrs, usually touring cities and getting dinner and a drink. During this time, I got everything on my phone and sometimes I may have to interrupt the conversation to get things on but its never a prob. We are usually back by 7pm where I finish out the rest of the market hours and I’m done by 9:30pm to finish the night. Through all that, I am usually tapped out and non important things get left to the way side until I get to an area where I can relax more and catch-up. So yah, If I am out, and I usually am, I’ll be looking at phone and entering those BWBs (for new trades), PCS (for raising UELs in HS3s etc), and entering them in-between talking to my kids at dinner or wherever else I am. I am using downtime during the day (naps or AM) to model and get a plan in place.

The HS3 futures in EDF are crushing right now, I started them I think in May and it’s up almost 35% or so. I reached profit target on 111 units in Oct 31 expiration and 20 units in Sep expiration. I have another 83 (SPX equiv) units on in Dec monthly which are more than half way to target and 61 (SPX equiv) in Dec 31 expiration that I just started on those two down days we had last 8 days or so 🙂

My HS3s in SPX/IB are also near profit target. Wonderful. I think I have on about 100 units there. Solid gains. My CC campaign is also doing great.

I added in some Rhino and X14V14s in for ATM trades. I changed how I manage upside in the Rhino but the main reason I added is I call it a middler which loves moderate down moves and helps hedge that little area where the market falls 2-5% and affects (short term) the HS3s and CC trades negatively re vol and skew effects. I love how it reacts together. I really liked the rhino in the old days as I remember being super upset about making 20% when the market moved up 50% over 2016 🙂 I will use it small as a booster and middler 😉

I am not sure where we will go next (we’re here in Croatia until the 11th but for sure I will be in Barcelona for the Pokerstars tournament on the 22nd where hopefully I can have some decent luck..

More to come as I have lots of time…

Big accounts and prepping for travels (HS3 and STT trades)

I am about to board a 24 day cruise and am preparing all of my trades.

I have this on right now:

250 units of HS3 (spread between ES @ EDF and SPX @ IB) (2.5MM planned capital)
20 units of Campaign style STT (1.5MM planned capital)
34 units of X4V14 (Locke style ATM BWB) – (765k Planned capital)
50 units of KH hedge (Black swan lottos)

So that’s quite a bit!

To prepare I have 2 sim cards (local EU with roaming and a CAD world wide roaming) as a reserve. I have unlimited internet on the cruise and I brought a portable monitor and laptop. I’ve entered GTC orders for every HS3 and STT so that they’re there for me. I’ve got all my models ready and none of these are particularly exposed to a BSH as they’ve all got BSH built in. Most of the work is entering, and I am fully entered. I’ve got the GTCs so I can close in crisis (hopefully at profit). The market opens here at 3:30pm-4:30pm depending where you are, so I am usually done my tours etc by then so I can attend to trades in the evening or early afternoon.

I’ve done this before and guess what, it was during Aug 24 2015 crash 🙂 Suffice to say I was tied to the computer for the last 4 days of that cruise. The internet handles IB with ease. Haven’t had an issue. It was different them, I was trading rhinos and Modified Condors. I needed to adjust.

Lately, skew and vol has increased due to trade war rhetoric and i’ve noticed my Decembers take a vol hit. Not a big deal but could have had better entries.

Back at it – April

After what was a very rough period from Feb 2 to about last week, I am starting to recover and regain my ambition and motivation.

I had a rough go with IB margin rules during Volmageddon (Feb). They had implemented a 30x rule which basically summed up the total value of the options and if it exceeded 30x the value of your account, you had severe restrictions with adding new positions/contracts EVEN if they were risk reducing. During what was one of the biggest vol spikes and thee biggest change in volatility (VVIX) the option pricing sky rocketed across the board, and when summed up vastly exceeded 30x. It’s a ridiculous rule and it was an unknown rule. IF I had opposing positions where I sold a put at $5 and bought another put at 4.75 they would sum the position as 9.75 even though there was no substantial risk in that position. In the vol spike, options 10x or more so they’d be $50 and 97.50. This summation technique would put the account in violation of the rule. This gave me problems for when I had to roll or remove hedges. They also used some bizarre calculations that would restrict even further. This left me in a very precarious position where the complexity of removing hedges and positions was very difficult. I couldn’t get off my variety of hedges unless I literally liquidated the entire account which would have been impossible during those few days. I tried as best as I could to remove hedges and small parts of income positions but I just couldn’t get it done in time and the hedges collapsed in value and the STT remained compromised.

Anyways, I’ve been nursing these remaining positions since February and have recovered much of it but not all. I hope that maybe I can get to full recovery by May or June. That’s my year so far.

Suffice to say, I am working with new brokers and won’t be using IB for PM type trading (STTs, HS3s etc). I will also be moving my base trade towards HS3 type trades, STTs in higher vol down moves and John Locke style trades (M3, X4v17 and some BB) as a booster and to bring back some diversification in my trade plan. I still like ATM type trades. I remember when I had the Aug 24 crash with my MICs (this happened right when I was learning the Locke trades and was just initiating). Soon after I had recovered the entire loss from Aug within 4-5 months using M3s and BBs. Anyone that traded MICs, would know just how bad those did during Aug 24 2015. I liked trading those things (M3). I eventually switched to Rhinos and did modestly with them but I hate the upside exposure on runaway markets. Though, I mean, I did Rhinos during one of the biggest up moves in history in the RUT. No wonder I was frustrated with those.

Anyways, that’s my current situation and plan re trading.

I am in Canada now visiting the office and some family and friends. I will be back again for the Montreal Party Poker tournament and probably touring Europe again this summer. I’ll post more about those travels and the trading complications there-in.

2017 Results Table

Below is a snippet of the 2017 results with time slices to see relative draw downs across all three trades.

The RED defines when we’d have exited for the trade but sometimes I tracked what if we hadn’t. I don’t even see a drawdown for the HS1 in 2017 (short of the -209 on the Jan 19th trade).

I will be testing the HS1 in random entries as well to see how the DIT changes and how bad draw-downs can get.

Jul 13 – Trading the STT and BSH

I am solely in STT and BSh trades at the moment. They are not as exciting as the older Rhino trades because they kinda just make money there isn’t much variance per say. The one cool thing I guess is that I am doing it in quite the volume. I think I’ve got about 600 units on right now total. That’s something interesting I guess.

I had a contact at IB for putting on orders via the floor but to be honest, I just haven’t used it much lately, I found I was getting fills easily enough myself at various times. I tend to scale in to each trade over a few days. One time I got quotes from them and I was getting better fills w/ units below 50 then they could get me so I just haven’t used as much as I would. That said, when I get bigger in size, I think I either need employees or I’ll need to use the floor 🙂

I got into a bunch of longer term Dec STTs most recently and I have a lower profit target on those (they take up a lot less margin) and are even more benign. I’ll probably start doing this, 150-180 DTE w/ 2x less margin requirement but I’ll aim for a 350 profit target per unit.

I’ve finally started the BSH factory but I’ve only managed to get on 50 units of that so far. It’s profitable as I sold the 50 units worth of puts at the very bottom of the last months range. Eventually, I’ll have to put on 500 units worth. That’ll be tedious and we kinda need more than one down day.

As for how the year has gone so far, it’s been slow re P/L OVERALL but exciting for P/L of the STTs alone—>Very exciting. The STTs did fantastic but the P/L from those were countered by losses in the first sets of BSHs which weren’t fully financed and bigly (no trump pun intended) affected by the losses on the old 2016 Rhino’s I had on until April of this year. I don’t trade them anymore. I just trade STTs and BSH.

Let me get into more details, I started the year off by trading some units of STT and BSh from January 5th when the course was released but not in size until April. All the STT trades did great and were profitable and still are into this month. Almost makes me giddy how good they do. However, the profits from Jan-April/May were offset by the losses of the remaining Rhino’s I had on that were started in Late 2016. They did terribly, by April, we were finally finished w/ those damn Rhinos and they had a larger loss due to the insane Trump up-move. Difficult market to manage the Rhinos. In one account, they lost about 88k while the STTs did about 130k (for the first ew months of 2017). Included in this were the poor performance of my BSH hedges and the financing. I quickly learned from waiting too long to get financing on and the community developed better ways of paying for them (RCs put on the same time) or BSH factories. I use RCs now but am working on the BSH factory. Ideally I just have BSH factories and the STTs. All that said, the last 6 months we’ve got very profitable STTs that were hit by older Rhino legacy trades and by poor financing of BSHs in early part of the year. The future is bright as we perfect the management of the BSH and STTs. I love how the STTs have done so far and I wish I hadn’t had the Rhino losses from last year nor the poor financing early on. Ah well, things are building up quickly re P/L now.

Dec 16 – March Rhino M3 Trade Entry

Not much going on. Trades gained some value today. Nice little down day in the SPX and flat for the RUT.

I entered some March Rhinos

50 x RUT:1290/1340/380 @ 2.19
75 x SPX 2120/2200/2260 @ 4.00

A bit far out but I do like to enter around 88DTE anyways.

I’ve converted most of my Jan trades into more M3 like structures today with the drop. I worry about a slow grind up for the rest of the holidays so figured I’d jump in front of that with some calls and futures hedge. Low volume rarely gets sold into. I do expect some January weakness though.

Oct 18 – Rhino M3 Trade Plan

Been a while since I posted. I haven’t needed any catharsis so that’s probably why 🙂 What a great/fantastic two month period we’ve had…I mean the market (RUT) didn’t move up 7% in a cycle! Can things get any better? The last two months have made the entire year, I might even achieve the 7 figure profit in a 12 month period IF the next two-three months behave. Major Major milestone. When I say behave, I mean it goes down, stays neutral or goes up 3-4% max. That’s all that’s needed. What a journey. I started trading by investing in AAPL and BRK.B, frustrated with the lack of hands-on, I got into earnings volatility options plays via www.steadyoptions.com and eventually on to Modified Iron Condors only to experience the most dreadful trading experiences in Oct 2014 and Aug 2015. Learning experiences! I finally stumbled onto the M3 and BB courses via John Locke and here I am trading BWBs in my own way profitably and into 2017.

As my portfolio and trading size gets larger, I’ve been putting on more and more Space Trip Trades in an effort to hedge my portfolio by way of cultivating the STTs to the point where only debit spreads remain on the first set while cultivating the other expirations to the same point. My main concern is an 9%+ gap down overnight. I want to be protected in any flash crash and a gap down of any size. It’ll take some time to cultivate the STTs to the point where they are providing protection for both the ATM trades and the uncultivated ones still in process (in the case of a 12%+ move). Once, I have adequate hedging I’ll start to increase my size past what it currently is. I’ll probably be sticking to SPX with versions similar to the White Rhino and Jim Riggios 100 point butterfly. I really like the approach Jim Riggio takes. Sell volatility when vol is high and buy volatility when vol is low. Simple. I’ve changed my style a bit and I don’t use calendars and I will probably be doing versions of reverse-harveys for the upside rather than using call BWBs. It’ll be sometimes selling or buying iron condors as adjustments to the butterfly structure (depending on skew and volatility). I might have to call my trade something else, probably will end up calling it PEAK.

My November trades are all 10%+ and I have already started closing them all out by removing risk and unwinding the structures.
I’ve got Dec expiry on and I’ll look to put on some January as we get closer to the election (option premium will be elevated and the BWBs cheaper to buy). I might hold Dec but if I am anywhere close to a 6% profit, I’ll probably close them ahead of the election. They’re doing very well right now so it’s possible.

Oct 10 – Rhino M3 Trade plan

Not much to report. All the trades are sitting comfortably, we’re in a range that isn’t affecting much per say. I’ve got Dec and Nov expiries on and profits are rolling in. Great few months.

NOV:
For RUT I have 1150/1200/1240s

For SPX I have 2040/2120/2180s

DEC:
For RUT I have a mix of 1140/1190/1230, 1150/1200/1240 and 1160/1210/1250s

For SPX I have 2020/2100/2160s

I am approaching the need to RH the upper longs for both trades but I will wait till tomorrow since its reduced volume today re Columbus day.

I’ve been backtesting a longer variant of the SPX Rhino (80/60 wings) where I start 88 DTE and end before 31 DTE. I reduce the planned capital by half or in other words, accept a 5% return on the original planned capital of 25k for 3 units. The results were very good so far. The trade is easier to manage both on the upside and downside though quite boring 🙂

I’ve also been looking at uneven condors as adjustments (sell and buy volatility when skew is favourable for either). I like how Jim Riggio approaches this. When volatility is low, and skew steep, I might enter a symmetrical butterfly with a long call (buying cheap iv) and convert it to BWB when vol gets higher on a large down move.

As for the market, I have not the foggiest where things will go but bonds should be putting some pressure on the SPX especially if we clear 1.75. I still see a small correction to the 2040 area before making ATHs for end of year baring no surprises re Trump.

Sep 29 -Rhino M3 Trade Plan

Nothing too exciting related to the trades this week. I usually have some sort of market opinion but I really don’t right now. My guess if I had to state one is that we’d see some more weakness into October and probably touch 2040 and rebound up to 2300/2400 into the end of the year.

I put on some more SPX Rhino trades today. The pricing got way better in the afternoon and I bought several 2160/2100/2020s @ 2.75 and 2.80. Across all of my accounts I have 370/740/370 on. Big. Lots of downside room and lots of upside room at those prices. I’ll probably try to close them all by Nov 8 (start later and end earlier).

Here’s what one of the Dec SPX Rhinos look like

screen-shot-2016-09-29-at-2-13-36-pm

I’ve got a bit of RUT Rhinos on but not as much. I had great pricing early on but been struggling to get pricing I liked the past few days.

I’ll manage the SPX upside if we should break 2200 by selling condors or RHing. I probably won’t use calendars this time around. I do like how Jim Riggio (Kevlar) handles his trades. Not much else to say right now.

I’ve had to do nothing with any of these trades lately, boring, which is good. I am erring to start more like 86-88 DTE and end by 30 DTE. I am working on a full backtest with some updated rules and adjustment types.

Sep 26 – Trade Plan

My whole day was spent closing down October trades. The SPX monster one reached 10% profit on planned capital, my other SPX ones hit about 7-8% as I was a bit more conservative with upside and the RUT one hit 5% or thereabouts. We’ve got 25 DTE and I am more comfortable starting larger trades later and exiting earlier, plus the SPX one was already at profit target. The debate is on tonight and if Hillary falls dead, faints, coughs for 20 min or anything else, I worry the market will open down big and if she does well, it may open up up big. So yeah, I closed them down and I am happy. I have some 200+ units on Nov/Dec across all the accounts and I didn’t need any Oct exposure.

I got some champagne for the debates (it’s sort of entertainment isn’t it?) and to celebrate the big result for the month. I cleared about 180k in profit across the Oct trades. One more month with a good result would put the account at about 30-40% for the year, maybe 50% if we got 7-10% P/L. Two good months, and I’d be laughing. Sounds like a lot, but the amounts exposed during the last 6-8 months and some of the swings, well, it’s somewhat deserved and I’ll be more comfortable after a few of those good months to cover any bad month.

I entered some SPX Dec BWBs (2160/2100/2020) @ 2.80 today.

Trade 1 – M
screen-shot-2016-09-26-at-5-08-33-pm

Trade 2 – P

screen-shot-2016-09-26-at-5-09-03-pm

Trade 3 – D

screen-shot-2016-09-26-at-5-09-28-pm