Ughhhh. Another very up and down week. This is mildly embarassing at this point. I have been trading successfully for years and years and have turned a monthly profit every single month going back to December 2017 using this options strategy. The one month I decide to broadcast my journey to others I have the first month in the red in over a year. Classic. The one thing I am mildly happy about is the fact that I haven't lost a ton of money and my account is still plenty recoverable and I have not put myself in a situation where I need to be desperate or drastically change what I am doing to recover. I fully expect to at the very least get back to my starting balance at the end of March but realistically would like to be at $2,500+ by the end of the new month! I am ready to put February in the rear view mirror and start off March on the right foot. Let's jump into some details and breakdowns of the trades from this week!
Below are all the stock tickers I traded for the week of February 25th 2019:
Below is the log of all the trades made for the week. This includes Profit/Loss and trading fees:
As you can see from the log above I ended the week with $1 profit! Woohhoo dollar menu here I come! But wait, I had $71 in trading fees... so I guess no dollar menu for me. Like I said in the opening of this post, looking forward to putting February behind me and get back on track starting in March. One change I plan on making is Over Trading. i know several of you have mentioned the fact that you feel I have been over trading and you may be right. Reviewing the past 7-8 months I average around 25-30 executed trades per month, and in this shortened month of February I executed 57 trades. WOW! So that is one thing I will be focusing in for the month of March. Making sure I'm not forcing trades and only executing trades on setups I am very comfortable with.
AIG - Option Put - 32% Gain - This trade was based off the strong resistance point it has formed over the past month and a half or so around $44.10. I like playing AIG because it usually presents a decent amount of movement throughout the day and has really good option greeks to increase the likelyhood of the trade playing out in my favor. I entered this put once the stock got up near $44 as the risk vs. reward was very much in my favor as if it broke out of resistance I would cut the trade for a minimal loss. As you can see from the chart below the stock had rejected this level so many times. I got the rejection I expected and was able to lock in over 30% gains on this trade. If you want to read the breakdown on this trade in more depth you can do so here.
WMT - Option Call - 50% Loss - When analyzing this trade I felt pretty confident we would see I pop in the price overnight upon entering the trade. The stock had fallen from $104 down to $99 recently and had bottomed at that level 3-4 days in a row. Stock was trading in a tight $99-$100 channel. I felt comfortable buying near $99 and expected a pop and at least be able to net 10% rather quickly the next day. That didn't happen. The reason this was such a big loss is because the stock tanked hard immediately at open. I found myself down about 45% on this trade within the first 3 minutes of the market being open. At that point I decided I would risk another 5% on the trade to see if we got any quick bounce up that could help minimize the loss. That never happened and I stopped out at 50% loss. I know I said I didn't want to take anything over a 20% loss this week. While that is easy for me to do during day trades it is much more challenging when swing trading as the swings the stock can make during pre-market trading or in the first several minutes can be hard to capitalize on.
BBY - Option Put - 40% Gain - BBY had just come off of a pop after earnings, I usually don't play stocks for at least 3-4 days after they had ER but I really liked the setup on this trade. I was looking at the hourly chart late in the day Thursday and decided to jump in puts. I felt based of the stock reaching oversold levels, peaking at $70 on the hourly chart and the moving averages being fairly far apart, this was going to be a successful trade. Market opened very strong Friday resulting in this stock popping at open, I held strong as I felt the technical setup was still intact. The rest of the day the stock fell, I exited at 40% gains, I felt I could have gotten more on this trade and even held into next week but wanted to lock in the profits while I had them. I broke down the stock in the chart below and you can read a further analysis of this trade here.
HTZ - Option Put - 64% Loss - I will keep this breakdown short, this was a dumb trade. Although the dollar amount was very small as a loss, it was an unnecessary loss and could have at least covered most of my trading fees from the week had I not gotten in the trade. This was an ER play,(I basically never trade earnings) I saw the open interest on this trade had heavy volume on multiple strikes and expirations and was super heavy on the put side. I thought maybe somebody knew something and decided to YOLO 1 contract put for ER next day. Stock jumped like 20% overnight on ER and that was the end of that trade.
Probably my main takeaway and focal point I have going forward is not over trading like I have this month. I didn't necessarily realize how much I was trading till I looked at the overall month snapshot and realized how many trades I've completed in comparison to previous months. Going forward I would like to keep it to 10 or less trades per week. That will put me back in the 25-35 trades per week. Some may still say that I am over trading but I was fairly profitable with that number of trades per month so I think going back to that will help me out a lot this upcoming month. It will also cut down on some of the TastyWorks fees which have been adding up, especially as of late when I haven't been gaining or losing much money trading, just blowing money of trading fees.
I still want to work on consistentcy and maybe identify slightly less risky swing trades(although that is slightly more challenging under current market conditions). The largest loss I took this week when Day Trading was 14% and I am comfortable with that. Both WMT and CVS were big losses due to massive sell offs on both at open the following trading day, would have been almost impossible to cut these for less than 20% losses.
TastyWorks Account Starting Balance: $2,366.78
TastyWorks Account Balance after Week 1: $2,249.47
TastyWorks Account Balance after Week 2: $2,216.47
TastyWorks Account Balance after Week 3: $2,277.47
TastyWorks Account Balance after Week 4: $2,207.47
Hope you enjoyed this breakdown for the last week of February...finally! Really looking forward to March and putting February out of my mind and get back on the right track! Thanks for all the support, comments and criticism. Hope you keep following along into next month!