Forex Is Crazy

These were as of Friday morning. Scott Redler who puts this together every morning, mostly watches the and plays the market stocks.

As I review this email, I get bugged by my comment that stating "I had traded options in my own account with marginal success". I have to sit back and ask myself what I mean by that. So let me share my thoughts. When I first started trading I started my account with about $18,000 in 2007 (Well I I actually had a smaller account with sharebuilder.com where I first nibbled in stocks, about $2,000). I had experienced some success in that sharebuilder account and had decided that I was ready to put some more money in and that I would need a better broker. This is when I found the discount broker Zecco.com. I funded my account with the $18,000 and never looked back. Let me remind you that this was still during the time that you could just about go long anything and make money. There really was no skill involved. So I did. I was so long that I had my $18,000 invested as well as the other $18,000 that the broker would let me borrow. In about 6 months I had made almost $10k, this was...

Hey Roy, Long time no talk. How are things going? How is the new location working out? I just thought I would check in and update you on my progress. I have been putting in many hours to develop my trading skills and hone in on the right time frame for me. As I had mentioned to you when we met in NY I had traded options in my own account with marginal success. Basically flat over the last few years. When I signed up for SMB's training course I had every intention of Day trading. But the more I did it the more I realized that I prefer not to watch every tick. So about 2 months in to trading with OVC capital I had to take a step back and re-evaluate what would be the ideal time frame and setup for me. That is when I decided to go back to trading options and apply the skills that I had learned from SMB, and this has been very successful. I still do make the occasional day trade if the trade is compelling enough, or sometimes I use options to make the day trade. Not that I have enough ...

The Failure Rate of a Proprietary Trader Jan 29th, 2010 | By Bella | Category: General Comments I remember the discussion like it was yesterday in our former 8×10 makeshift training room/office/conference room/lounge, with the first trader who ever failed at SMB Capital. JJ announced he was leaving to take a six figure job at a financial services company in NYC. But let’s be honest. JJ was leaving because he was not making money as a trader. And while he put on an off to better things face, JJ did not want to leave. I did not sleep well for a month. I felt like his failure was my failure. And I am sure JJ did not sleep well for two months prior to our exit conversation. I still miss having him as a part of our firm. JJ was the most likable guy on our trading desk. But these scenes happen every quarter at even the best of proprietary trading desks, including the big banks. My manuscript is done and in the hands of Wiley Publishing for One Goo...

The picture is this week's volume with commissions. With all the free trades I still ended up at roughly .75 per contract. Just for the hell of it I added on the $10 fee I wasn't aware of and it's still a good average price to pay per contract. However, this isn't a typical volume week for me. So I will monitor my volume and fees and make a change when/if it makes sense.

Another name that reports on Monday 2/1/10 is XOM. Does not look like the market is expecting much. But I decided to buy 20 Feb '10 $70 call contracts for .11. I am risking $220 dollars. Take a look at the price slices below. In the first screen shot I left vol alone and then I adjusted it down by 5%. Historical vol is currently at about 14% and this option is trading with a vol of 19% so an adjustment of 5% would put it in line with historical. The options market is only pricing in about a 3.8% move based on the front month straddle. This gives XOM an expected range of 62.75-67.70. Like I said this is just a gamble, but if it hits I could win the option lottery so to speak. Every once in a while I like to take these small bets just for fun. Have to fullfill that gambler inside.