My Options Trading Unlocked – Newsletter 15 Oct 23

Newsletter – My Options Trading Unlocked : Insights for Tomorrow’s Profits

15 Oct 2023

Weekends are a perfect time for reviewing options and drafting trade plans

Read on, maybe I can inspire you to get prepared for the upcoming week

My goal is to share my journey and help you profit from options trading. I write about my thoughts on options trading and finance in general. I provide information about my trading and my insights, that could be helpful to you in options trading, especially focusing on applying strategies and what I anticipate in the stock market for the upcoming week. Every week I report on the status of my trading accounts.

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1. Options Talk – Thoughts and Opinions

“Weekends are a perfect time for reviewing options and drafting trade plans”

Whether you’re just starting or have already dipped your toes into the options trading market, it’s essential to develop a routine that fosters growth and profitability. In this newsletter, I’ll share my weekly ritual preparing for the upcoming trading week, which can guide and maybe inspire you on your trading journey.

My weekend ritual – a blueprint for growing success

• Review Your Trades: I do take the time to meticulously review each trade I made during the week. This is where my journal spreadsheet becomes my best friend. I track not only the details of my transactions but also the strategies I’ve applied, the credits received, and above all directional risk management practices. This step is crucial for understanding what works and what doesn’t regarding the mechanics of my trades.

• Identify Patterns and Lessons: I also look back at both my successes and failures. I always ask these important questions: Was I consistent in selling premium in high IV (Implied Volatility) environments, following the tastytrade philosophy? Did I manage risk effectively? I do try to dig deeper and understand the “why” behind my outcomes. Learning from all experiences is the key to growth.

• Plan for the Future: With these insights from my review, it’s time to adjust and plan for the upcoming week. I assess if I am over-allocated in a particular sector or if I need to rebalance my directional risk. This forward-thinking approach ensures that I am well-prepared to focus on all my positions and to take action when needed achieve my monthly cashflow goals.

• Sharing and Learning : I don’t want to be an island in the trading world. My aim is to continuously learn and share my experiences with the trading community, via my newsletter and by engaging on X and Youtube. My motto is that collaboration and knowledge-sharing can open new doors and perspectives.

• Embrace continuous learning, as I said, in the world of options trading, continuous learning and improvement are your allies. Embrace the philosophy that continuous learning leads to higher profitability, both in life and in options trading.

Trading is important, but so is life balance. I also focus to take care of your health, relationships, and personal development. I took a long weekend out, doing exactly that, prepping mentally for next week. Hence why this newsletter arrives with a short delay.

My thoughts of this week. Let me know if you share any of them and how.

I had a rather calm week with little to no transactions.

Happy trading, and may your options be ever in your favour!

2. Overall Market Overview

When I prepare for trading or following the market and my positions, I focus on two aspects : the general trend of the market with the indexes, mainly the SPX and the volatility of the stocks with the VIX. The reason why is clear: the general trend of the market and stock volatility are essential for options traders because they directly impact options pricing, influence trading strategies, and offer opportunities for risk management and profit generation in the dynamic world of options trading.

And then again, I don’t want to over-analyse too: but basically the SPX trend and VIX levels are not far away.

The SPX index closed up 19 points this week from 4308 to 4327.

SPX Chart – SPX 4327 $

Market outlook for next week : One could expect the market to follow through a bit more upwards and bounce around a bit and hoover a bit around this spot 🙂 Nobody knows anything so I am not trading direction.

VIX Chart – VIX USD 19.32

The VIX spiked on Friday (around 20.80), came back below 20 on Friday, but finally ended at 19.32, almost 2 points up last week (17.45).

3. TOCF Portfolio Weekly Recap & Trading Plan

a. My actions last week (02 Oct – 06 Oct 23):

Closing Positions : No positions closed this week

Opening & Adjusting Positions :

• Adjustment $XLU – 02 Oct 23
  • Rolling my $XLU Short strangle 53P/59C position:
  • Rolled Put up to 57P for $0.48 credit, total credit received now at $1.97
  • Not rolling up to the straddle yet, giving some room to return.

In general this week was a waiting and patience game!

b. Results week (02 Oct – 06 Oct 23) & currently open positions:

Here is an overview for all accounts of the positions and results of last week – no trades closed :

The October profit target is $1350. This week I will remain at for $373 profit, since no positions were closed, you can see the distribution above. The profits (or losses) are always the sum of the results of the closed positions during that given period.

d. My Trading Plan for upcoming week:

At portfolio level :

• The MX account is in euro en the TT accounts in USD. Sum of the values of the 3 accounts = $69471.00 USD (or 66,053.00 Euro)
• I have been working on reaching and keeping a descent delta/theta ratio. The sum of the SPY Beta Weighted Deltas of my three accounts is 23.87 (meaning if the SPY goes up $1, my portfolio value will down up $24 and vice versa)
• I am aiming for a 1:2 ratio (or lower) with neutral delta/theta. My positions have made a nice recovery and after adjusting some positions where required, the delta/theta ratio is at 0,26 at the moment. Exactly in the range I am looking for.

Most of my open positions are still in the red : the unrealised P/L is down to $(2983).

At individual stock level :

• I am looking for $PYPL and $LYFT
• I will continue selling cc and lowering the cost basis on AMD, LYFT and PYPL (as good as covered).
• I have rolled and adjusted the $IWM positions to Nov. And I expect to make a profit on both.
• The only real problem child at the moment is the IC $UNH who breached the call side and will expire in a week.

4. Weekly Watchlist

My special attention remains for the coming week to my 17 held positions in 12 different stock: AAPL, SOFI, AMD, MARA, LYFT, ORCL, UNH, SMCI, FSR, PYPL, IWM, MSFT, GOOGL

Currently no special attention for a specific stock that I want to take a position in.

5. Other stuff – info & links

As a reminder:

• the Trade Results Page a historic graph of my trading results of the last 3 years, is updated for Sep 23
• A permanent project is to improve the page My Approach to a methodic Options Trading Strategy and Profit Goals. I am really hoping to exchange some thoughts with you all on this topic, so leave me your thoughts in the comments of that page!
• I aim systematically reviewing and re-reading about options topics. To deepen my understanding of all the greeks I have decided to capture all relevant aspects of every greek in some sort of guide – page, that I can share. I have started with delta and you can read it here : Delta Explained – What is it and how can options traders use it
• Coming very soon : my 7 steps trading plan template (see my thoughts at start of this newsletter)

Whenever you’re ready, here are 3 ways I can help you to improve your option trading:

1. For the option traders still looking for a Trading Options Spreadsheet to track their results and improve their trading, check out the EASY “All In Trading Options Journal Spreadsheet”: the ONLY option trading journal designed to focus on parameter-based options trading and account management, as probabilistic-minded options traders like me like it. Checkout this article about the spreasdsheet, the multiple tutorials about the spreadsheet on my Youtube or read about the spreadsheet directly available in our webshop

2. If you are not a Free member of our discord yet : In our discord channels, we team-up with other like-minded option traders, with the aim to support each other and share valuable insights and ideas. I provide live comments, trade alerts, educational info and tools via our discord room. Join anytime ! here: http://discord.gg/cGW6xH4RNT
3. In case you haven’t found me on social media: I suggest to follow me on X @L2TradeOptions and on Youtube @TradingOptionsCashflow to pick up my latest content.

I hope that providing some insights in my trading and my thoughts, will trigger some thoughts and maybe ideas that will help you with your trading and helps to become an even more profitable options trader. Don’t hesitate to contact me to talk options.

Thanks for reading the TOCF Newsletter, a great weekend and happy trading!

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Let’s generate cash flow together !

P&K

Please do leave your thoughts below in the comments.