Trades this week (Apr 17 - 21) - First major loss
This past week (April 17th - 21st, 2023), I opened 2 new positions, and closed 2 existing positions.
It was difficult to find many good trade setups this week. I also took my biggest loss on a trade (so far).
Opened:
- EA
- RUT
Closed:
- GLD
- ATVI
Let's take a look in more detail:
Opened Positions #
I opened one Bull Put Spread (BPS), and one Bear Call Spreads (BCS) this week.
1. EA (BCS) #
- Opened: 04/19/2023
- Expiry date: 05/19/2023
- IV%: 55%
- Current price: 130
- Sell call @ 140
- Buy call @ 145
- Premium collected: $65 / contract
- Volume: 2
Notes:
EA has been in a strong uptrend the past month, but in the longer term (9mos-1 year) it has been in a flat range, or slight downtrend. It's nearing some major resistance at the 130-133 price area, and overbought, so should at least pull back a bit towards the 20-ma. Hopefully.
2. RUT (BPS) / Already expired out the money #
- Opened: 04/19/2023
- Expiry date: 04/20/2023
- IV%: ?
- Sell put @ 1780
- Buy put @ 1775
- Premium collected: $90 / contract
- Volume: 1
Notes:
This was a new kind of trade for me. RUT ... i.e. the Russell 2000 index. I was watching some random video about European options, and the guy mentioned trading RUT. I looked at the chart, then the options table, and it seemed like a good setup and profit margin. So, I entered a trade without thinking much. It expired already, so I ended up making $87 (after fees). I should probably understand how these options actually work before trading them again though.
Closed Positions #
Closed 2 positions, one for my biggest loss so far.
1. GLD (BCS) #
- Opened: 04/12/2023
- Closed: 04/17/2023
- Total days: 5
- Premium received: $57 / contract
- Premium paid: $41 / contract
- Volume: 2
- Net Profit (after commissions): $22
Notes: I was not happy with my entry on this trade last week, so I decided to just get out of it. Luckily managed to take a small profit. If I had held on, I would probably have a bigger profit right now, but that's fine with me.
2. ATVI (BCS) #
- Opened: 03/30/2023
- Closed: 04/21/2023
- Total days: 22
- Premium received: $99 / contract
- Premium paid: $129 / contract
- Volume: 3
- Net Profit (after commissions): -$90.87
Notes: Was also not happy with entry on this trade as I completely looked at the chart wrong 😂. After realizing this, I should have just exited right away, but I held on hoping and praying it would work out somehow. It did not. Earnings next week, so decided it was time to pull the plug.
Summary Notes and Thoughts #
Got lucky making a random trade on RUT. Managed to cancel out my loss on ATVI. I'll need to learn how these European options actually work to see if it's something I can use every week or not.
This week was really slow overall; couldn't find anything to sell through my typical scan setups. Market hasn't been very volatile recently, so maybe I need to adjust for these conditions. Or, I need to learn a new strategy to use.
Have four open positions right now (GILD, ETSY, TSN, EA). GILD has suddenly gone against me, so will probably be taking a loss on that soon.
I've decided to lower my risk level to 1% per trade (down from 2%). I've realized I'm still not comfortable with the 2% level, and haven't been following it consistently.