My Options Trading Unlocked – Newsletter 23 Sep 23

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

23 Sep 2023

Watch your Deltas… ! Do you know your portfolio delta?

Read on, maybe I can help you better track your portfolio delta ! Look for ➡️ ➡️ ➡️

My goal is to share my journey and help you make a profit from options trading. I also write about my thoughts related to options trading and finance in general. And everything I think you may be useful to share about the stock market for the week ahead as an option trader. Every week I report about the status of my portfolio.

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1. 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 in my mind : 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: so SPX trend and VIX levels are not far away.

This week we had a Fed meeting in the USA, reporting that they decided to leave interest rates alone for now. But because inflation is s still a bit of a problem in the USA, another rate hike at the end of the year is quite possible. The market does not like rate hikes and this possible future rate hike seems to be visible in the market this week.

The SPX index dropped in a pretty big down week from 4450 to 4320 with a loss of 130 points or almost 3%, and look at the gap-opening on Thursday morning. Some may argue there is a resistance line now around 4320, but there is still some room till the SMA 200… The RSI also shows that the market is oversold, so we could expect a bounce… but who knows… that why I prefer to take no directional bias.

SPX Chart – SPX 4320 $

Market outlook for next week : Nobody knows anything so I am not trading direction. One could expect the market to follow through a bit more downwards and bounce from the mentioned resistance levels or maybe hoover a bit around this spot. For my positions, I hope to see a bounce in the market next week.

VIX Chart – VIX USD 17.20

Clearly a nice jump up from 14 to 17.20 this week. A higher VIX means higher options prices and gives us option sellers the possibility to have a bigger return.

2. TOCF Portfolio Weekly Recap & Trading Plan

a. My actions last week (18 Sep – 22 Sep 23):

Closing Positions :

• 18 Sep 23 : Closing $AAPL 170P/190C Strangle for a 11 day 234% return, closing for $2,25 debit, resulting in a net P/L of $222,00 with a ROC of 7,16% and an Ann ROC 234%
• 21 Sep 23 : Closing $AMD Covered Call 106C for a 10 day 529% return, closing for $0,33 debit, resulting in a net P/L of $245,00 with a ROC of 14,7% and an Ann ROC 529%. With stock down and below my breakeven point, I am looking to continue selling CC soon, when stock has partially recovered.

Opening & Adjusting Positions :

• Opening $FSR – 21 Sep 23
  • Opening new positions in FSR in both portfolios:
    • Opening a new position in $FSR: STO 5 Naked Short Put 6, ExpDate 17/11/23, BP $2550, IVR 12,6, SpyB_Delta 4,06 with PoP 61% for a net credit of $0,85 (tastytrade portfolio)
    • Opening a new position in $FSR: STO 10 Naked Short Put 6, ExpDate 17/11/23, BP $10000, IVR 12,5, SpyB_Delta 8,07 with PoP 58% for a net credit of $0,88 (Mexem portfolio)
    • $FSR is one of my favourite stocks, adding $11 daily theta.

• Adjustment $IWM – 22 Sep 23
  • Rolling my $IWM Short Strangle 180P/190C position: rolled call down to 180 straddle for $1.83 credit, total credit received now at $5.17
  • Rolling my $IWM Short Strangle 175P/193C position: rolled down 193C to 185C for $0.57 credit, total credit received $4.33

• Opening $AMD – 22 Sep 23 :
  • opening a new position in $AMD with 1 Covered Call 106, ExpDate 20/10/23, BP $1061, IVR 18,2, SpyB_Delta -10,24 with PoP 81% for a net credit of $1,52
  • part of my AMD wheel strategy trade

b. Results week (18 Sep – 22 Sep 23) & currently open positions:

Here is an overview for all accounts of the results of last week:

The September profit target of $800 has been met and breached with currently 1293.00 USD in monthly profits on the closed positions. This week alone, I could close two positions for $467 profit.

I will keep my the trading goal for October at $1350. Completely in accordance with my strategy. In case you missed it or you hadn’t had the time yet, here is the link again to “Developing my strategy and profit goals guide”. Any thoughts or comments you may have on this trading strategy document, please don’t hesitate to email me or write them in the comments of the page.

c. 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 = 69,238.00 USD (or 64,994.00 Euro)
• I have been working on reaching and keeping descent theta level, while keeping a descent delta/theta ratio. The sum of the SPY Beta Weighted Deltas of my three accounts is 69,59 (meaning if the SPY goes up $1, my portfolio value will go up $69 and vice versa)
• With the steep dive this week, I have more deltas that I aim for, hence why I also rolled my IWM calls down. I am for a 1:2 ratio with long delta/theta. It is at 1,08 at the moment. I will look to keep improve my ratio further next week,by adjusting my positions and maybe a market bounce will help me too.

Most of my open positions are still in the red and this down move didn’t help either : the unrealised P/L is down to $(3774).

At individual stock level :

• I am looking for $PYPL to make a bounce so I can add a call with descent premium.
• I will continue selling cc and lowering the cost basis on AMD and LYFT.
• $IWM can remain and sit where it is right now or even slightly up.
• Although $FSR moved down quite a lot on friday, I am quite confident in my opened $6 put position.
• $UNH made a relative important move up towards the call strikes of my IC. I will let this position work out and not touch this IC.

3. Weekly Watchlist

My special attention remains for the coming week to my 15 held positions : AAPL, SOFI, AMD, MARA, LYFT, ORCL, UNG, SMCI, FSR, PYPL, IWM

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

4. Other stuff & info

I have been working on my a couple of projects this week:

• the Trade Results Page : a historic graph of my trading results of the last 3 years.

• 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!

• ➡️ ➡️ ➡️ In my journey to enhance my understanding of options trading, I am engaging regularly in dedicated review sessions. This involves revisiting and studying especially risk management concepts I already know, with the intent to reinforce my foundational knowledge. I am currently working on a review about delta for beginning option traders and how we can use this greek to better manage our positions. I will put it out there for you all soon. I believe you should have a clear idea of your portfolio delta at all times.
• I aim, by systematically reviewing and re-reading about options topics, to deepen my understanding of options trading.

I also want to mention that am very happy and satisfied about the received feedback from some of our spreadsheet users. I also clearly notice a daily spike in people visiting the all-in trading spreadsheet journal when the markets open. Clearly people are aware that keeping track of trades (and ➡️ ➡️ ➡️ tracking deltas in a systematic way is quite important – my all in spreadsheet aims to do just that, and much more).

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.