November showed how good October was. It made flat feel like a loss after having such easy money the month before. I gained a little, but was essentially flat. I could’ve done better if I didn’t pull back on my risk exposure as much as I did, but sometimes it’s
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November showed how good October was. It made flat feel like a loss after having such easy money the month before. I gained a little, but was essentially flat. I could’ve done better if I didn’t pull back on my risk exposure as much as I did, but sometimes it’s better to reduce risk and wait for a better day to trade than lose money. I have roughly ,500 in time value left to melt away between now and the December and January expirations. The vast majority of that is from my puts, so a flat to higher market will help me on that front. I still have a good chunk of intrinsic value in my MDY put and most of my UWM puts, so any gain there would obviously help too. Oil can pull back some and I’ll still be fine. Other positions like DSX, CSX and JPM will probably be closed out before the end of the year so I can start fresh and clear up some more cash. However, I’ll hold on for now to see if we get a good Santa Claus rally by the end of the year.
Just as I said last month, the speed at which the markets change directions continues to make selling options the less than ideal tool to use. I’ve proven that I’m not a good day trader, so I don’t see a major change in my approach coming. The only change that I’ve made so far that seems to be working is using more inverse ETFs and selling puts on these when I see the market starting to roll over. This is an art and I’m just getting started on it, so doubt I’ll go full steam with it any time soon, but as long as the market’s move are so violent I will probably have to start taking some profits sooner than expiration to make sure I lock them in before we get a reversal and those profits turn into losses.
This is the breakdown of the numbers for me:
The VIX ended the month at 27.80 and the VXN ended at 27.77. Both of these are even lower than at the end of the previous month. The road lower wasn’t straight by any means as any spike in volatility proved to be a great opportunity to sell puts. Now that volatility is back near the bottom of its trading range for the past four months it’ll be interesting to see if the bottom falls out or if we get another spike higher.
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