nef, if wait long enough, one will get a chance again. Been there, not sure what changed for me this time, maybe I got old enough. But, looking back, life without trading was simpler and maybe better on quality.
I think it's our own greed that kills us in the market. I am still reckless sometimes, but I try hard not to do certain things that failed me before, likes the ones mentioned earlier, and buying high, selling low, etc. Maybe some time off will give you a new insight or lead you to something better than trading.
nef, because of those reasons, I don't buy cheap OTM options or expensive ATM options, and I only sell options that I have capacity to get assigned, meaning I don't sell too many of cheap OTM options that I cannot get assigned when they become ITM (so that I don't lose the position). I just try to play the house without too much of leverage.
Billy, I also missed the chance to sell my CORN shares at summer's high, but I was aiming for much higher gain and not a major position. Still holding CORN not because I know how crops would be but because it's been down for so long and stayed low for quite some time just like NG. Plan to add if it sells off during harvest season.
Started selling JNUG near-the-money calls from yesterday, from farther out weeks to nearer weeks, not because I am sure it will come down soon, but because just one sell off will make all of them expire worthless, key being risk management.
Been holding 30Y T bonds from May, tiny 4% dividend is 40% annual extra gain while waiting, given 10:1 leverage in treasuries. Been waiting for 30Y interest rate fall below 2.5% (then gain will be decent), but not happening yet. 10:1 leverage means it may result in considerable loss if rate rises quickly and it can and it did in the past.
As for NG, waiting for it to pull back down before adding to long. Good Luck Trading
Sold 2 JNUG Oct 4th week slightly OTM calls. Hope JNUG strength continues for a bit.
Missed chance to close a bit of VXX short shares after hours. Hope I get a better chance tomorrow.
Account huge plus. Account just about 6% below ATH. Finally getting close back to account ATH. Should be around ATH when VXX gets to $20. Really looking forward to VXX ATL, not sure whether it will happen though, but would be fantastic.
Shorted 2K VXX shares in pre-market. Market reaction to jobs report (S&P +10 to -36) drove me crazy I guess.
Closed 1K VXX shares short after market, little bit after closing.
10 VXX deep ITM calls sold assigned shares short.
10 VXX then ATM calls sold most likely to be assigned 1K shares short (strike 24, closing 24.03, it may or may not get assigned depending on whether the call holders decide to exercise 24 calls when VXX went below 24 after hours, going up and down crossing 24 strike price). VXX was in a hurry to 24 before closing but didn't quite make it, very close though.
Everything else didn't work out today. Missed changed to sell SCO calls, missed chance to sell SKX puts against shares short.
Account big plus, good enough to feel better over the weekend. VIX spot is getting closer to 20 one more time. Hope this time it's different.
Sold 10 VXX Oct 5th week ITM calls.
Sold 2 KOLD May 2016 slightly ITM calls.
Sold 2 KOLD May 2016 ATM calls. Didn't start buying UNG shares yet. Hope it breaks $11. Maybe I am waiting too long.
Missed chance to sell SKX puts against shares short, yesterday and again today.
Account some more plus. Finally VXX is not so strong after hours today in a long time. Holding too much of volatility shorts. Want to unload much and with it to buy some gold coins or mini sticks (guess result of reading too much negative news), wishful target to unload 1/3 of them is too low for now.
Jobs report tomorrow, never thought I would see another jobs report with VIX futures still in backwardation. Don't see much risk though, if bad, most likely bad news will be good news, if good, everything else is so bad. But market works differently than what I think most of the time.
Yes, konn, basically my trades in KOLD calls are with option market maker. It comes with cons, like you mentioned, very large spread and low volume, also no weekly options. But this is the only thing I can find to short leveraged NG short ETF. Margin requirement is high because it's 2 X short, twice as much as regular stock at similar price, The advantage is volatility decay in 2x and much higher break even short price with premium from calls sold, want to collect 2x decay and option time decay.
Maybe I will start buying UNG shares on another leg down if happens, or move into deeper ITM KOLD call sales. Not recommending KOLD to anyone. After all, shorting leveraged ETF comes with higher risk.
konn, you are not alone in seeking lower risk lower return by selling options. I added to KOLD May now ITM calls short, which will give me 49% (average of yesterday & today's positions) compared to margin requirement, by May 2016 that is. I'm confident that they will expire worthless with volatility decay of 2x by expiration, unless NG goes straight down all the way.
I think as account grows, one is bound to and should seek lower risk lower return. In fact, your 30% per year is not low at all by any standard, beating the heck out of S&P index, let alone hedge funds. Not sure how many retails achieve that with relatively low risk and consistency. Good Luck Trading.
Sold 10 VXX Oct 4th week ITM calls.
Sold 2 KOLD May 2016 ATM calls. Missed chance to sell another set. Hate DGAZ is still not available for short.
Account some plus. Finally a market bounce but VXX is still strong.
konn, I think you mis-calculated, NG 2.2 corresponds to UNG 10 to 10.15 or lower if it happens with later month future. I started to sell KOLD May 2016 calls, going in little by little hoping for some more drop in UNG. Would love to short DGAZ but no short shares are available in my broker and no call options to sell in DGAZ either. Good Luck Trading.
- Worst of all, they started charging margin interest in my account when I had less on margin (as percentage of total balance) compared to a couple of months back.
When I asked them why they charge margin interest when I have less on margin compared to total account value than before, all they can say is it's complicated.
There's no way from their account page that I can check whether my account is subject to margin interest at a given moment or not.
So, fed up enough, finally pulled everything out of the broker.
So you know there is a broker that doesn't allow ordinary folks to trade VXX, long or short. Just ask whether VXX trading is allowed before opening to avoid this one.
No trade, almost sold KOLD LEAP ATM calls but called off half way down to bid price.
Story about a Broker I tried since I didn't want to keep everything in a single broker:
- For spread orders, price increment is determined by highest price option leg.
When you have spread with $5 option and 50 cents option,
price increment for the spread will be forced as 10 cents (based on $5 option) instead of 1 cent.
Had hard time convincing them this is wrong while they argued this is as per regulation,
and when finally convinced them, they said they will include fix in release planned for 5 month later,
even the web-based order.
- Cannot trade USO options, but can trade SCO (2x USO) options and JDST (3x gold producer short) options.
Not sure what their logic is.
- Cannot trade VXX, XIV, SVXY, UGAZ, DGAZ, on and on
When I called them and asked what it would take for me to be able to trade VXX,
they say customers with larger funds can trade them, and I ask how much is larger? They say several millions. Wow~~
- Cannot short shares after hours or pre-market
- On the day NFLX went through 7:1 split, my 400 short shares became 2800.
I could not close 2800 from web order page with an error saying I didn't buy 2800 shares.
I had to call to put in the order, and took them a couple of days to make it work in their web order page.
- Have to cover margin calls in 2 days.
- Doesn't show margin requirement for each position, only the sum for the entire account.
- The only convenience is that moving money between checking and broker account is instant
and the money transferred can be used right away to trade stocks and options.
Yes, I still claim UNG tracks NG futures correctly based on what the issuer said how it will track in the prospectus for UNG, and NOT based on what you think how it should track. It doesn't care what you think. UNG prospectus describes how it's going to work.
Everyone playing UNG here knows that UNG rolls futures and contango in NG futures will eat away from UNG little by little, larger contango means larger decay, but not as much these days. During after hours, bid/ask spread is larger in UNG with much less transactions, which will make it difficult to compare to NG future prices and also tracking errors.
It's just amazing how some people refuse to get educated. For your own good, call me stupid, and stay away from UNG which you don't exactly know how it's supposed to work. Good that you did your home work however incomplete or blindsided that may be. Enough of my wasted time. Good luck.
commander, I've been here posting daily trade journal for a bit more than 2 years. I don't believe in anyone telling anybody else what & when to buy/sell, let alone getting paid doing so. Maintaining my own account is challenging enough. If one followed my posts close enough, one would know that I have losing positions, some losing a lot, (not the ones zach points out, those are winning positions closed earlier than max profilt).
Just one suggestion for you. When you go after people predicting or offering their view on where VXX will go, why not go after for both the direction, up and down, and not just down? Good Luck Trading & Policing.
zizu, I think about 50% compared to end of 2014, not so much compared to 2014 peak, but still good enough to pay a lot of tax at least for now. VXX short is eating away from my gain recently. I consider that as saving in VXX short, of course as long as I can keep the position that is. Good Luck Trading.
Bought some XIV shares.
Closed 1K SKX shares short.
Sold 10 SKX next week near-the-money puts against SKX shares short.
Added GASL long.
Account some minus, loss reduced with market shorts down much. SPY 4.9 down, VXX 1.9 up, not too bad.
billy, that's what site "investing" does when they switch from front month to next month for their charts for futures. Their NG up today is Nov Future today against Oct Future on Friday, silly but that's what they do.
konn, I think the strategy is good when NG is not spiking. When NG spikes up say 30%, front month future will go up more than later month future goes up, like what happened back in early 2014, turning futures curve from contango to backwardation. You can also check NG future pricing on Oct 2014 spike. So, may have to be careful on winter season. Difficult to wait out in those cases as the front future expires soon.
May have to unwind when futures curve starts turning into backwardation. Also it may result in loss even in contango if NG goes up as front month future will move more than later month future. Not sure whether there will be decay in front month, since NG future is different from SPY future where SPY is settled based on S&P 500 index value but NG future settles with just future price if I am not mistaken (no index to converge to). You know great things don't come without strings attached, especially financial instruments. If gain is good when it works, loss may be big too when it doesn't work. Good luck trading.
Cannot reply to your new thread, hence on old one,
nmbvua, let me take another stab at it to show you UNG is tracking NG futures quite well. If you are referring to 2.60 on 9/17 low after inventory report, no ETFs can track accurately those sudden plunge like in NG futures for a couple of seconds after inventory report well. 9/17 was last future roll date of futures held by UNG from Oct to Nov, most likely it will be holding only 1/4 Oct NG futures and 3/4 Nov NG futures.
Data for you to compare
9/18 4PM Oct Future: 2.61, Nov Future 2.682, UNG 12.33
9/25 11AM Oct Future 2.551 Nov Future 2.618 UNG 12.03
Down Oct 2.25%, Nov 2.38%, UNG 2.43%
Oct Future price is nothing to do with UNG from 9/18. No point in looking at Oct Future price while trading UNG now.
To me UNG 2.43% down is close enough to Nov Future 2.38% down (0.05% difference maybe due to re-balancing or volatility decay, tracking error or bid/ask difference). To get back to UNG 12.33, Nov Future (Not Oct Future) has to go back up to around 2.683 from current 2.618 (NOT from 2.551), not bad at all to me.
Also looks like FX daily's quote is not real time future price quote when I checked with future prices provided by my broker. Seems NGV2015 (or NG1! first month future) is delayed about 10 minutes or so, NGAS is closer to Oct Future price but never quite match.
If you really want to check the correlation, find out which month futures UNG is holding, check prices of the future and UNG between 2 specific times (not with close prices, times for closing price are different between stock and futures), and verify whether the chart you are looking at is without delay or correct ticker.
Best to use broker provided future quotes if real-time. If not, you can check 10 minute delayed NG futures quote for all months at (search cmegroup henry hub future quotes) or close to real time first month (only first month) future at (search natural gas interactive chart investing). Enough time with this issue. Good luck