EL TRADES OPTIONS

This blog will show my longer term Swing trades using OPTIONS. I use specific income producing option strategies with a DIRECTIONAL BIAS. Having a directional bias is critical in earning more, even from what are generally called income trades such as butterflies and condors. The aim of my strategies is to give me more than a 66% edge and to provide a greater than 80% win rate within that edge. The blog shows you the trades I make and how I manage them. For my directional bias, I use the same EL methodology as I employ in my day trading that you have seen for years in the original ElectronicLocal blog. Read the disclaimer.

Wednesday, June 13, 2012

Butterfly

This is the first post in this swing trading options blog. I'll start off with a trade from last week. It was a directional butterfly, as are most of my trades. The short strike is in the direction I expect the market to go. My goal is to make money from the both the directional move and time decay. In this way, I can make money even when my direction choice is incorrect. I use my usual methodology to choose direction with daily data.

There are times when the position will need to be adjusted, but I do not monitor these trades throughout the day, just once a day.  I have profit taking orders in GTC and alerts by email in case something unusual happens.

The pics below show the opening of the trade on 11 June and the closing  on the same day with an 11% profit. This is highly unusual. My expectation is to run a trade for 3 to 15 days. You can see the positions annotated on the risk chart. My commissions are about 75 cents a contract.




I put on another trade yesterday - a butterfly. It's the first tranche of a position I want to put on as the market rises. I'll add similar butterflies with different centres as the market rises. If the market falls then I'll take profit on this butterfly.



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6 comments:

  1. John SJune 13, 2012 at 6:08 AM

    Hi Tom, I am one of your students from your other course and still doing great. Are you planning on doing a seminar for options because I would be very interested. Also, what is the options software your using displayed above. Thanks.

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  2. Electronic LocalJune 13, 2012 at 10:33 AM

    Hi John, I'm getting some requests for an options course and if there are enough enquiries then I'll do one. It will be very different to what is out there as I would teach people how to do what I do with options as seen in this blog. Glad to hear you are doing well.

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    Replies
    1. John SJune 13, 2012 at 11:14 AM

      Sounds great Tom. You forgot to mention the software used to generate the options trades shown above. Thanks again.

      Delete
    2. Electronic LocalJune 19, 2012 at 3:08 AM

      Option Net.

      Delete
  3. Marshall JungJune 13, 2012 at 11:51 AM

    Hi Tom,

    I have followed your EL blog for years and use the methods on a daily basis. I don't do futures because I have a day job, but I have done options for years as they give me a "once a day" method of income investing. I'm very pleased with your new blog and look forward to following along.

    ReplyDelete
  4. Electronic LocalJune 19, 2012 at 3:09 AM

    Thanks Marshall.

    ReplyDelete

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