Trades this past week (May 8 - 12) - More RUT

14 May 2023
trades

Another pretty slow week. Traded some more short term expiry index options, and got out of a couple positions that weren't doing anything.

Opened:

MS
RUT x2
SPX

Closed / Expired:

DLTR
MDT
RUT
SPX

Let's take a look in more detail:

Opened Positions #

I opened four Bull Put Spreads (BPS).

1. MS (BPS) #

Opened: 05/08/2023
Expiry date: 06/16/2023
IV %: 25%
Current price: 84.50
Sell put @ 77.5
Buy put @ 75
Premium collected: $30 / contract
Volume: 1

Notes:
Made an order for multiple contracts, but only got filled for 1. First time this happened to me. Couldn't find anything to trade; only banks have high volatility recently. MS seemed like the safest of them all. Oversold and coming off recent support at 84. Unfortunately, it has since dipped back below since then, and not doing much else.

2. RUT #1 (BPS) #

Opened: 05/09/2023
Expiry date: 05/10/2023
Current Price: 1740
Sell @ 1715
Buy @ 1710
Premium collected: $77 / contract
Volume: 1

Notes:
First of my RUT trades. One day to expiry, with really good profit margin and probability. Not sure how I got this, but it worked out really well. Ended up taking profits the same day (see below). Should've just let it run to expiry.

3. SPX (BPS) #

Opened: 05/09/2023
Expiry date: 05/10/2023
Current Price: 4120
Sell @ 4050
Buy @ 4045
Premium collected: $40 / contract
Volume: 1

Notes:
Another one day expiry similar to RUT trade above. Not as profitable %, but also closed the same day.

4. RUT #2 (BPS) #

Opened: 05/11/2023
Expiry date: 05/19/2023
Current Price: 1740
Sell @ 1670
Buy @ 1665
Premium collected: $36 / contract
Volume: 2

Notes:
Second RUT trade of the week. This time I picked an expiry a week out. Lower profit margin (around 8%), but very high probability of profit. Will still close it out early if hits 50% profit.

Closed / Expired Positions #

Closed 4 positions.

1. DLTR (BCS) #

Opened: 04/25/2023
Closed: 05/11/2023
Total days: 16
Premium received: $70 / contract
Premium paid: $65 / contract
Volume: 2
Net (after fees): $7.2

Notes: Opened this trade a couple weeks ago. Didn't really do anything. Started moving against my position, then pulled back to support. Decided to close it out, as it seemed to be holding the daily 20-ma. I thought I was going to take a loss, but managed to squeeze out profit of $7. Better than a loss!

2. MDT (BCS): #

Opened: 05/03/2023
Closed: 05/10/2023
Total days: 7
Premium received: $0.88 / contract
Premium paid: $0.60 / contract
Volume: 1
Net Profit (after commissions): $25

Notes: Decided to take profits early on this one. Only had a small position, and didn't seem like it was going to do too much soon. Thought it would be better to use my capital elsewhere.

3. RUT (BPS): #

Opened: 05/09/2023
Closed: 05/09/2023
Total days: 1
Premium received: $0.77 / contract
Premium paid: $0.35 / contract
Volume: 1
Net Profit (after commissions): $37

Notes: Same day open/close. My GTC triggered. Quickest $37 I've made. Really should've just let it go to expiry. Still not sure what the optimal way is to play these short term expiries. Do I take profits early? Or let them all run to expiry?

3. SPX (BPS): #

Opened: 05/09/2023
Closed: 05/09/2023
Total days: 1
Premium received: $0.40 / contract
Premium paid: $0.15 / contract
Volume: 1
Net Profit (after commissions): $19

Notes: Same situation as RUT above. Again, should've let it run to expiry would've been the much more profitable choice. Though, I guess there's nothing wrong with taking profits.

Summary Notes and Thoughts #

Another week where trading short term expiry index options was the most profitable strategy.

It seems almost too easy.

I'm skeptical that I can do this in the long run, so still doing really low volume, because I don't have a real strategy/plan on how to play these. Will continue to do some research, and see if I can come up with some trading rules that make sense.