• Brandon

Today's Market Moves

For details visit the CLT Options Trading Log and watch today's weekly trade IDEAS video

Today was a busy day, opening 5 new positions. I will elaborate more on these positions in this week's Saturday Portfolio Analysis, but, I've decided to reduce proportional risk per position from an average of about 3.5%-4.25% down to 1.25%-2.5%. I have suffered two proportionally large losses so far this fiscal year, one in each quarter, compared to two in all of the previous fiscal year and one the year before that. If I can eliminate those kinds of losses, in doing so attempting to reduce average loss/win ratio, then my equity curve should become more stable and/or grow. The last large loss I had was uncontrollable; I was in the wrong place at the wrong time. However, that loss essentially took away all of my gains from a streak of 9 straight winners. If I want to return a profit this year, that just can't happen.

So instead of trading larger risk positions and adjusting when necessary, instead I will seek to close losers "early" in order to reduce losses. It's not an ideal position to be in but with my average win return of 0.35-0.50% ROC, I simply can't afford to be taking losses of -1.5% ROC as often as I have this year, especially since such losses are not the only ones that I have taken!

All of the positions I got into today had great fills, which is nice, but they were accompanied by high commissions. Again, I will explain in more detail in the upcoming SPA, but with such great liquidity already in the options of the ETFs I'm trading in, it's difficult to add more liquidity and thus it's hard to avoid the fees that come with removing liquidity. Pick your poison I suppose: would you rather have a bad fill with low commissions or a great fill with high commissions? You're either paying the broker or the market maker! Oh well - perhaps they will be lower when I exit these positions...

Here's to hoping all 5 positions see a profit and once again getting back to even before the end of the quarter in just about a month's time!

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