New Initiative: Day trading options.

It's almost an ideal to trade weekly SPX options on the day of expiration in my mind. No overnight and multi-day risks. Fastest price decay. And with the addition of the Wednesday options, one can trade like 7x per month in this manner. I will probably continue the weekly iron condor routine. In fact, of the last 4 iron condors I put on (3 of them virtually and "on paper") all were successful although the real one was hit by Brexit but still managed to make a $320 profit on a $1200 max loss....profit would have been $860 if it closed clear.

I also recently learned about calendar spreads. That really adds another dimension to options trading. Not only are there a multiplicity of strikes and expiration time frames, but one can trade cross-time frames as well. I'm hoping to do calendar spreads on SPX...The advantages are 2-fold: you can basically sell a strangle without all the margin necessary to do so. And strangles are the most profitable things possible...the protection of an iron butterfly reduces the profit tremendously of course. And sine the long portion has a much lower delay than the shorts you can exit the longs after the day and they will have the majority of their value while the shorts have gone to nothing.

The second advantage is one could keep one or the other side of the longs on overnight etc. if the market is starting to rally or plummet and then potentially make even more money! Even after the calendar trade is closed.

If calendar spreads don't work there are also double diagonals and if I can't do these on such a short time period I can always make iron condors or regular butterflies or double butterflies or ratio spreads...the options are numerous (excuse the pun) however the calendar spread holds much promise to me. The big issue is it will probably be very expensive relative to other trades and thus although it provides good odds a lower-yielding iron condor might be more worthwhile. That rally advantage, however, is something to consider. Basically if the market was rallying strongly and you got hit on the short, you could hold the longs and potentially make much more. However, you could always put additional trades on so really...meh.

Since I am now fully committed to inverse volatility at the moment, and I don't know how well or if this will work, I am going to paper trade it. Good boy! Paper trading the experimental strategies before employing them! Very good.

Self improvement time.

This guy is good: https://youtu.be/4a51wQAOGR4

Apparently other viewers think that his other videos are good as well.

All in to Inverse Volatility after Brexit. Wish me luck.

So this is the first time I've put everything on the line...and then some....I dipped into my margin a bit.

I made quite a few mistakes. During the day the S&P500 fell 3.55% (and wound up hitting my short bull put spread of an iron condor at 2040...cut in to by closing at 2037.41. Since I had gotten a $4.20 credit on the 10 pt spread I still made money on the trade. But instead of $860 or so I wound up with $320. And the crazy thing was during the last 5 minutes of trading when SPX was pushing 2050 and I thought for sure I would be OK, I could have bought back the short for less than $100 USD. Next time if it gets that close in such a scenario I will have to do that. Things could have been a lot worse that day with the iron condor since the max loss was 1.2K and...Brexit ya know?? SPX -3.55% is a very big move.

Early during the day, I thought (stupidly) that somehow maybe markets would rally and volatility would subside. I wound up taking a nibble of 30 XIV at 25.744. Then I decided to make it 100 shares as SPX started to rally. But the brokerage was clogged with orders. Later reporting stated that volume during the first 30minutes of trading was as much as up to lunch on a normal day. So Optionshouse was lagging. I accidentally submitted 2 orders to buy 70 shares. And when I tried to cancel the second, a few seconds later I was informed that it had been filled. So I wound up with 170 shares at $26.10 or so cost basis...and then of course SPX goes down and XIV 21.49 to close at 22.00. So now I'm like 700 USD in the hole on this stupid trade. I mean the principle was sound but I got in far too early.

Then on Monday, SPX fell again, but VIX receded as SPX fell. Furthermore, VVIX fell. XIV, however, reached a low of 20.21 (in after hours) and since I decided to dollar cost average as XIV went down, I bought 100 more XIV after hours at 20.33...this was even lower than it went in the regular trading session. I had an order ready at 20.22 and was following it lower but wound up not getting it that low. Why I didn't buy more than 100 shares I do know...I was just scared. Although the signs that this was the end of the xiv decline were there, and I had an opportunity of a lifetime in after hours, I only bought 100.

Then today, (Tuesday) it took me until XIV climbed to 23.08 for me to buy at that price. I could have gotten in as low as 22.21...22.60 easily. But I just was afraid things would collapse...wasn't looking at the evidence. But then I saw SPX break 2025 and decided to go for it since this was said to be an important level by some article I read. And I went all in and bought 530 more shares for a total of 800. I realized if I just hung on to my 270 shares I could only make 2.something K on the trade. And as I am now trying to trade full time that just wasn't enough by any means. I had to put more money on the table, and it was pretty much now or never for this episode. I was already sort of late.

Thankfully XIV continued to rally and SPX continued to rally so at market close my position was OK. Of course I am concerned because I am used to volatility lasting for much longer than this seems to have. However, here is another piece that gives me a little bit of comfort.

So although I went all in an entire day late and left ~$2.7K on the table due to my retarted trading...the only thing I got right was buying those 100 shares at aftermarket. But that should have been 800 shares. Or 900 shares. Or 1000 shares. Oh well, it's hard to be perfect.

I'm honestly concerned because vix closed at 18 something. It can't fall much further! It can only fall another 25% or so. And honestly I don't like to be shorting volatility when vix is ~19. However, I shorted it when vix was 25 or so and xiv was 26. They don't move in sync necessarily. I suppose I'm counting on a long period of the vix futures being in cotango (they just came out of backwardation today! (another of my indicators to go long inverse volatility)) to reach my 50% profit target of 9K on this trade. XIV gets hammered when volatility spikes...and VXX gets hammered when volatility is low and futures are in cotango. I think we could get to levels on XIV of 36 which is where we were at before Brexit hit. Higher is possible if we have a long period of relative calm.