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Trading Diary #1

(Wednesday, March 29, 2017)

Wow! And wow again. If you start predicting the market, this is what you get. I am glad I stopped predicting the market but focus on trading and adjusting those trades.

But sometimes this can backfire too.

Like my US Steel (X) trades which recently the stock acted so violently that all my positions in X were totally destroyed. And I mean out of order.

What happened? First the stock sold hard, so I rolled worthless out of the money calls into the in the money calls so I could pull my deep in the money puts up the hole. But then the stock rallied again making my calls a problem instead of a help.

Now I have to work the calls out of the hole.


But, this is still a part of my strategy. Although it can be frustrating at times.

The next thing I did yesterday was that I somewhat liquidated a small portion of my WYNN contracts.

At the beginning of the month I had 6 strangles against WYNN with January 2019 expiration. Yes, you read it correctly. It is an almost two year contract.

Last year, I made $20,000 on WYNN, but in December 2016 WYNN bit me hard. A few very hard sell offs flushed my 100 strike puts to the sewer. And my net-liq with it.

I was more than $6,000 dollars in a margin call. I had to act. I took some losses by closing a few contracts and the remaining ones I rolled. And I rolled them several time until I ended in January 2019 expiration day.

I ended with 6 strangles and very good strikes – 80 strike puts and 100 strike calls.

I thought, this would safe and wide enough spread so the stock could do whatever it wanted for the next two years.

Wrong thinking!

I still managed to lower my strikes on the puts side even lower, down to 77.50 puts, and rolling calls from 100 to 125 strike. I was also able to close 2 contracts at the beginning of March 2017. I was left with 4 contracts total.

It cost me around $2,600 dollars. I expected March to be a losing month. Yet, I continued trading and made all that loss back! I made the entire $2,600 plus $300 on top of it!

This makes me happy as I haven’t expected this at all.

Yet soon I was hit by WYNN again. The stock, which was trading in 2 years long channel of 100 – 80 price suddenly broke up from that long consolidation. The rally quickly endangered my 125 calls.

I managed to roll the entire trade higher – calls to 140 strikes but I had to roll my puts higher too to 100 strike, 105 strike and 115 strike. This helped me to unload another call contract yesterday for a small loss which is still covered by money I made this month.

It still baffles me as my WYNN trade blocks over $15,000 dollars of my buying power! It is dead money!

Now, I have 3 call contracts and 4 put contracts. Still blocking a lot of cash!

Next month, I plan on doing the same thing as this month. I will close another either put or call contract for a loss and will trade it to offset that loss.

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