Forex Is Crazy

Over the last few weeks I have been busy developing a analytical platform to help me visually see what the WC products market is doing. Like I have mentioned in previous posts, there is not much out there fore this OTC (over the counter market). Although I am still in development I do have a working platform that I am using and looking at on a daily basis. So first lets take a look at the Dashboard Page: My NYMEX Screen: My Refinery turn around and outages page: You will notice on the Dashboard page, this is my one stop shop to see what the market is doing and has done in the most recent past. I have my own proprietary model to give me buy and sell signals on west coast products. The rest of the information is informational and helps me evaluate the overall market. I still have plenty to add to this platform. But this is a good start. Take a look and ask me any questions you may have. I know that many can not relate to this market as it is not really open to the retail guy. But I just ...

Hello, First time creating my own post, let's see how this goes. In the video I update a trade I talked about on Friday, and describe the trade I put on today. Let's see if this works. http://screencast.com/t/YXRRP9u4

This is yet another first for me where I learn the hard way. I was short 10 SPY weekly Calls last Friday. Based on the way we finished the day I decided to stay short even though they were .30 ITM and take possession with a short position of 1000 shares at 131. Over the weekend I was assigned two separate times for 5 contracts each, which means I paid the $15 assignment fee two times. I never noticed this in the past at Interactive Brokers because they do not charge for assignment. So something to consider for the future, I suppose it's possible I could have got assigned 10 times for one contract each. Wouldn't that be a bitch. Depending on how many contracts your position is, and for this trade in particular, it might pay to just offset your options in the last few minutes of trading and simultaneously short the stock.

I wanted to share my NG trade experience in case anyone has or was thinking about trading this instrument. I've been long one contract since 1/28/11 when I was assigned a long position via a short put. It's been a nightmare ever since. When the FEB contract was to expire I decided to roll to MAR because I still liked the chart and I was willing to be patient for an upside move, but I was down -$2300 at that time. It cost me .035 ticks to roll contracts, with a 10,000 multiplier that cost me $350 just to maintain a long position. So not wanting to be down -$2650 I sold a covered call for .035 to make my contract roll even. The chart below shows the breakeven points for entry in to the MAR contract, the purple line in the middle is where I would breakeven from the -$2300 loss, and the top line is where I'm capped at a 4.30 strike covered call. I've been watching this chart daily for two months and growing uncomfortable with the position as it just isn't going anywhere...

This is one of those trades that happened so fast I never did any pre or post-analysis until now. I wasn't sitting around waiting or even anticipating that VIX would spike up. I just happened to be watching on Wednesday when the panic hit. I was already in a position with short 48 strike calls on VXX for APR expiration that I sold for .46. At the time that trade was put on VIX was at 25 and VXX was 35, so this was meant to be an income play but I'd be more than willing to stay short volatility if I inherited a short position up there. Now, because I already happened to be short those calls, when the spike in vol happened I noticed my marked-to-market position on VXX was way upside down, like by more than $-2,000 on just 10 contracts. I thought this couldn't be right since VXX was at 38, I was still $10 OTM!! So I bring up the option chain to confirm what is going on and see what looks like free money. The IV of VXX had shot up over 100% and the skew was crazy. The IV was go...

I look at this month as mixed results. At first glance the bottom line number doesn't look so hot, just $575. That doesn't pay the bills. However, I came in to the month with marked-to-market losses on some futures contracts and was forced to roll those early this cycle, and thus turn those MTM in to realized losses. So considering I started out the month with realized losses of about -$4700, I feel great that I ended up with positive realized gains. I actually had my best month ever selling equity option premium at $3863. This is kind of my bread and butter and what I've been doing for the last two years. Recently I've purposely tried to design my portfolio so that I've got offsetting types of strategies and asset classes, so I color coded my trades to get a better feel of the overall action. Historically I've just sold ITM calls or OTM puts and it's all time decay, it's all the same strategy, there really wasn't anything to track and compare other ...

1175 on the S&P is only a 12.5% correction from the highs. Given we've had a 100% move from the bottom this seems more than reasonable and probably healthy as it will wash out some weak hands. I'm not predicting this will happen, but it is the target number that I'm tentatively planning on doubling down at. Tentative because I need to see how/why we got there. If it happens in the first five minutes tomorrow because all six reactors are spewing radiation, nope, probably not stepping in front of that. If it happens in a more orderly fashion and over the next few weeks, I'm probably interested. Again, i'm not saying this will happen and you will not see me saying I told you so, I'm saying I'm not willing to play further until/unless it does happen. I'm comfortable with my current positions even though the largest one is getting anal raped.

So the charting capabilities out there are very limited. This is mostly due to the fact that this market is much more emotional and fundementally driven. But when I started trading west coast products I made a concious decision that I would try to blend in some new school with the old school. Since I am so mathmatically and technically driven it was only natural for me to come up with a way to not only chart west coast products in a form that I am use to and prefer. But to also develop a way for determine if it is overbought or oversold. So the first thing I had to do was collect the data, which I have done for LA CARBOB (gasoline). The first thing I wanted to see was a candle stick chart for flat price (see below): Although the majority of trading on the west coast is done by way of EFP...there is some trading that happens on a fixed price basis. But on this same note...because the market is almost all traded in EFP's I wanted a chart that would allow me to determine if the diffs ...

So haven't written in a bit as when I go back to read what I've written over the past few months....Nothing has changed. I'm still doing the same things I was doing on the last blog. Acquiring metal stocks and chip stocks. Gold and silver went on sale at the beginning of the market today. The reason is people were liquidating things they've made money in the cover the things they've lost money in(margin calls) Pick it up while it's on sale.  So over the past two weeks I've sold off my chip stocks and started moving my hedges out on the metals to take advantage of the next leg up over the next year. I was a little concerned about the metals prices specifically silver and gold until the earthquake last week in Japan as it seems they had run to hard to fast and needed to back off a bit so I kept my hedges in place(via selling short calls against my long leaps). This worked out perfectly as the metals have sold off over the past month or so just as I predicted a...

This is my first attempt at doing a video for my trades instead of a long write up with screen shots. Please let me know what you think. I already realized one mistake. My chart has is labeled as selling FEB call/puts but those were MAR expiration option. Thank you. Jason E-mail: JasonAndrewHaas@aol.com Tweet

Pre-Post background As many of you who follow this blog are probably aware, Jason has been the primary contributor for about the last six months or since I got an opportunity to move into the trading group at the company I work for. Prior to this trading opportunity I was working as a financial analyst and trading options in my personal account. I started trading in 2007 and have come so far from those early days. Although I was learning the markets since I began, I did not start to make huge progress until I met Jason sometime in early 2009. We began the blog in May of 2009 and the learning curve has been exponential since the start of this blog. It really was probably because of this job and the things Jason and I have learned together that afforded me the opportunity to be offered a full time trading job. The Job When I was first offered the job I was considered for my technical know how and deep understanding of the ins and outs of options. My first charge was to get a Options and...

Forgive me as I usually keep the posts on this site strictly to write ups of actual trades or something relevant to trading. I try to keep things pertinent as I get discouraged when I see people blog about nothing in particular or put up links to other sites just to act as if they are doing something. So on this post I wanted to self indulge a bit in order to share some stories that I hope resonate with somebody out there who either currently follows or finds this blog sometime down the road. I’ll warn you ahead of time it turned out to be a long post. This past weekend I found myself looking through some old files on my computer. I was a bit taken back by what I came across. This ended up being an eye opening experience for me. The screen shot below shows the spreadsheet of my first ever foray in to trading with options that wasn't related to writing covered calls. From 2000-2007 I strictly wrote covered calls, which at the time was a third income stream for me so I just looked at...

I was actually hoping the 30-yr bond auction today would be a dud and I could exit my short positions in the futures and the OTM calls. But it looks like the Middle East has put a temporary bid under bonds. Long-term I still think there are many headwinds for bonds to move higher, so as sickening as it feels sometimes to short against a spiking chart I did it anyway. I shorted at 120'16 and also sold a MAR3 weekly 121 call for 0'31. We're right at long-term resistance at 120'26, if we break that I'm going to have to take a wait and see attitude on adding any additional short exposure. I've got my buy to cover at the recent support near 118'16. Also, something isn't quite right with today's action. Why was oil down? Perhaps that signals the move in bonds has less to do with the Middle East and more to do with the overall equities sell off. Whatever the reasons, I am comfortable with short exposure even if it moves against me in a big way as in time th...

I wanted to update this trade in case anybody was following. Here is the link to the initial trade . I actually intended on updating last night 3/9 but got busy and pushed it off. So the screen shot of the chart below is yesterday's close on 3/9, which was the reason for the update because as you can see we closed right on support. However, today we broke support and I don't see a really well defined next support zone. With six trading days left I might be looking to close this leg out for a scratch trade and just let the 25 strike calls expire worthless and make the profit on the trade there. I sold the puts for .28 and the mark today is just below that. Each night I analyze my positions and ask myself if I would still put this trade on today, because if not, you should close the trade. Today's close is the first time I would say I wouldn't be interested in selling short the 18 strike puts. At the time of initiation I liked the idea. But because we've now broken a...

I just placed a OCO order in on the ES. I'm playing for a bounce off support to fill the gap. I bought at 1302, limit exit at 1314, stop loss at 1299.50. Risk/reward is 12:2.5 or 4.8:1 E-mail: JasonAndrewHaas@aol.com Tweet

Last Friday 2/25 I put on a designed low risk income trade and didn't bother to post about it. But now I want to share my experience since then and how I'm probably guilty of over-trading this position. So for the sake of context, I'll explain the original trade idea first and then show you what's happened since then. The idea was to take advantage of a relative high IV in (MO) combined with a bullish chart to sell some OTM puts for a March expiration income play. So here is what I was seeing: Bullish trending channel Past support at $24 High IV (high for MO, not high in general) So I sold (30) MAR 24 puts for .17 on 2/25, intending to hold until expiration and pick up $487 after commissions. But at the end of trading on Monday 2/28 I could buy those puts back for .08. Normally I would strongly consider taking this play off simply based on the percentages. Any time you can lock in 50% of the maximum possible gain in one trading day, I do it. Why take another three weeks...