Today went very well for my account. The overall market was up a little a most of my stocks were up but not up much. Apple was the stock I really wanted to go down but it was up again today by 2.48 to 420.97. I am now looking at a major loss on my options in Apple. The intrinsic value of my 420/425 Call option is .97 which means if the stock ends at 420.97 the actual value of the long options (buyers) would be .97. I sold these options and to buy them back today it would currently cost me 1.95 so the time value of this option spread is .98. I made a decision to hold onto this position due to this high time value and also due to the possibility that the market will go down on Friday. Its taking an educated risk but I could lose an additional $305 per spread if Apple continues higher. I bought back my 405/400 spread and sold the 415/410 put credit spread so my window for full profit is tight (415-420). I lost $243 on my Apple options today. The jobs numbers will really provide direction early on and I'll exit out of these positions immediately if the stock and market head higher or crash.
All my other option positions moved in the correct way I was hoping for. Mastercard was my big winner being up 3.12 to 586.18. As long as MA doesn't go down below 580 on Friday I'll make a huge profit. I made $507 on these options today.
All my other positions did well and I made $772 on the day in my account. I have a lot more profits left on the table so I'll be looking forward to Friday. I should be able to bank full profits on all my options on Friday but there's a little risk with Apple, MA and GOOG if the market really moves a lot one way or the other. I don't see that happening so I like my chances going into expiration.
Jonny
Your blog is very interesting to read. However, I was wondering what your thoughts would be for this topic: "What is the ideal investment to start trading options and what did you start up with to reach the 14k amount that you are currently at?"
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If I were starting up with options I would probably start with at least $5,000 but $10K preferable. It really depends on your goal and your strategy. I have found that in the past I tended to take larger risks with my account when my balance was low so you should make sure you only invest what you can afford to lose. You need to have a full plan in place and know when you will get out of positions if things go against you. When I first started I didn't understand options fully and lost a lot of money. Once you have the knowledge of options and have a plan in place you can make your deposit. I would also suggest paper trading for at least a few weeks before doing it for real. You can paper trade at thinkorswim.com.
ReplyDeleteI started with $15K back on May 1st and due to some very poor choices and bad luck my account balance got all the way down to $6,800 on May 15th. Since this time I've managed to bring my account back up to $14K. And this is after withdrawing $2K just last week so I'm actually up $1K from my original investment. From here I plan to continue making money each week. Jonny