Lay Lie LEH

Ever since Friday, I have been doing well in my stocks (rather option) trades. Not all of them are big winners, but since Friday, my “liquidating amount” in my account has gone from $3900 to $6000, as I write this. Of course, this is the current potential profit that I could get were I to close my account now. However, that’s not the case, I am staying in some of my position, although I may take profits on a portion. After all, I want to enjoy the fruits of my option labors.

So What Do I Got?

BIDU - Long OTM puts, worthless… a gunslinging gamble that went bust. It wasn’t much, but it didn’t work…

CAT - Puts, but the break from the long channel has been underwhelming. only my UNH puts have been more boring then the CAT puts. It’s still making some money, right now it’s at 2% which is better than what the bank could give me. I might close this one and move on to something more exciting.

LEH - Pick these gems up on Tuesday, 15 minutes after the Bell and less than 2 days later, they are worth 60+% of their initial value! With most of that coming today! I will want to take profits soon. I may do the take 1/2 of your positions on this one and let the others ride with a trailing stop.

LVS - My SHOWGIRLS! Even though it’s a Casino, hey, their entertainment. I have a big position (7 contracts) on this one and it’s moving in the right direction. Hell,, 5 of my contracts are at almost 200% return… better start taking some profits, especially since LVS reamed me last month on a credit spread that went totally against me.

OXY - This is one of the play that is outside of my rules. I had a large position (5 contracts) it went South and so I sold 3 of the contracts to minimize my risk, but I was still bearish on the position. It’s a July Put (I got 2)… it’s still in the red, but moving in the right direction.

UNH - Moving in the right direction, but unbelievably BORING! I’ve had it for about 2 weeks, it’s been in the red for the most part, but now it’s UP $25… oh wait… make that $10. I’m ready to sleep on this one.

V- Probably my biggest “no-no” trade. I’m expecting that bounce anyday…and I need it. It’s a big stinker right now. My big problem… didn’t buy enough time. June Calls that are over $1,000 in the hole. I should have been more on point with my Risk Management here.

VIP - Held over earnings, actually had some calls before earnings, bought some put just before earnings, hasn’t done much. Could get out with minimal loss and move to a more action-packed stock.

So that’s where I stand, I have no problems giving full disclosure of my account. I am a different trader, just like everyone else out there… so you may not have made the same trades. You may wished that you had on some and laugh at me on others. However, telling you how and why I got in (or out) can help other traders realize their own rules and methodology.  And maybe Methodology is a better word than Rules when it comes to trading, because Rules should be broken as the market changes and morphs.

May Performance

I can’t believe that it is already June… wait I can. I have passed my 1 year of trading and in August will be my one year of active trading. So how do you measure your perfomance on the market? Is it weekly? Monthly? I do monthly and I started to look at my overall hit/miss ratio.

So let’s take a look at the numbers:

Percursor - I had a HORRIBLE April. I basically lost 65% of what I had invested. It was an expensive lesson but one that I have fixed. So, I went into May still licking my battle wounds and although it was an overall down month for me, it was a successful month:

Stocks Bought/Stocks Sold (6/5)
Gains/Loss (1/4)
Net Return = -$84.10

Options Bought/Options Sold (43/41)
Gains/Loss (22/19)
Net Return = -$682.00

Spreads Expired (1)
Gains/Loss (0/1)
Net Return = -$490.00

I think the thing that sticks out the most is that I had more gains in the options, but they weren’t profitable enough to overcome the losses. I know that I did this with my RIMM call options that hit my target and I got out. However, I left some profit on the table. One reason is that I had a small amount of contracts, so I wanted to take my profit, and in that I am not upset about the trade. However, if I had set a trailing stop that was much tighter, I could have made more in this trade.

Also in May, I went to Draper UT to the Investools Corporate Headquarters in Mid-May. It was here where I really honed down my rules and trading style. Just as Neo saw the Matrix differently, I see the stock market differently now.

I get the privilege of presenting what I learned in Utah to the people in the Chattanooga User Group. What’s going to be really tough is to condense 3 days of knowledge into 1 to 1-1/2hr.

My Win/Loss Ratio (All-Time) is 53% (W) / 47% (L)

I am going to an Advanced Options workshop in Atlanta in the middle of this month. I’ll go back to Atlanta in September for an Advanced Technicals workshop. I would have really liked to have reversed these, but given the cost of travel, this is the cheapest way for me to go.

I’m looking for a great profitable June.