Recap after 6 weeks of Steady Options

[JeffD 11]

For what it's worth, thought I'd share my experiences for both the amusement and education of others.  There should be nothing quite like hearing from another newcomer what it was like to jump headlong into trading the Steady Options strategy.  So far, I have done (or messed up doing) the following:

• Went directly to trading with real money, although at the minimum allocation on every trade
• I have never been able to paper trade, it just doesn't simulate investing real money or hold my attention and everything that goes with it (but be prepared that you can and will probably lose money if you start this way)
• Have so far placed 31 trades, of which I closed 28 and made a profit of 2.7% overall
• I wasn't new to trading, which I think saved me, because I wouldn't have been able to deal with the ups and downs on zero experience
• My results would have been much better, except that I made the following mistakes
  • Chased fills on calendars, particularly on Netflix, feeling desperate to get into the trade after it was posted (way too excited on the first few days)
  • Later saw Kim's warning not to chase fills (woops)
  • My losses on these trades were higher due to overpaying for the position in the first place
  • Accidentally entered an Iron Condor or Iron Butterfly backwards on more than one occasion (I think this is easier to do than people might think)
  • Accidentally had an expiring option assigned to me, noticing that all of the sudden I was short 100 shares of Starbucks in my account, and then I was unable to cover it for a few days, which cost me money - Track your expirations carefully, I thought I would never make this mistake and then wham!
  • Decided to switch to Interactive Brokers from Fidelity, had my account locked up for three days, missed the exit on the QCOM trade, which cost me a big loss (I didn't realize the transaction of money to IB would happen immediately upon my request, then lock up my account)
  • The entire transfer of money to Interactive Brokers failed because of this mistake - make sure you don't have expiring options that are less than 2 weeks out when you make a switch like this!  
  • Developed two trades on my own, based upon forum content - a BABA calendar trade and Disney hedged straddle, of which the BABA trade was a loser due to a big surge in the share price and the Disney was a nice winner
• And perhaps my biggest mistake, on the very first day with SO I saw we were doing a Netflix calendar with puts, so I thought we must be bearish on the stock and so I sold my regular stock position in Netflix, then later read the detailed description of calendar trades and realized it was all about capturing the decay of the shorter option against the longer one.  I should have held on to my Netflix position!  But as Jesse Livermore said, this is like a tuition fee for learning a lesson.
• I'm trading on top of an intense full time job, and I have found that I make mistakes when work is going crazy, even though I think I'm on top of things.  So I guess the message is don't underestimate how confusing this can get when you have 10+ trades open at once and you are stealing 5 minutes out of your day to manage the trades.  In the future, I will keep much more precise records and also probably limit the number of trades that I have open.
• So hey, bottom line, I have had a blast, learned a ton, and I didn't lose money!  But now I realize this will take years to learn.

I hope this is informative and/or amusing to someone.  

This is a great community.

Thanks.

[Kim 7,480]

@JeffD

Thanks for sharing your experience! I think it is very helpful, especially for new members.

I must say that you were very lucky with your transfer. Some members shared their experience while transferring money to IB that it took 3 weeks! And during all that time the account was locked and they could not trade. Potentially could be a cause if huge losses.

Overall, you did very well, considering all the mistakes and circumstances. And sharing your mistakes should help others, so thank you for that.

The most important lesson is in your last sentence:

bottom line, I have had a blast, learned a ton, and I didn't lose money!  But now I realize this will take years to learn.

If you came to this understanding after 6 weeks, then I feel I did my job well. 

I welcome feedback from other new members. Those are among the most valuable topics for new members.

[mccoyb53 805]

Just to add to Jeff D's comments

I have been a member for coming on two years now and also have made a lot of mistakes. My main ones were holding thru earnings because I didn't have a system for keeping on top of the dates. What I do now is review every morning what GTC orders I have in and adjust if stock prices have moved. I then look at all my open positions and check against my manual list of all the earnings dates of my trades and orders. I keep a log of all my trades the same as Kim does for his performance every month. My results are getting better all the time. Jan 18 was my best month yet. I did about 15 trades and got approximately the same results as Kim overall. 14% return in 1 month  !!!!. I am very much enjoying the service and learning all the time from Kim and all the mentors and members. In Jan my main winners were IBM Hedged straddle, SVXY diagonal, LLY straddle, Msft hedged straddle, EBAY sraddle, FB calendar, TLT butterfly trade, Jnj hedged straddle, Goog calendar, sbux straddle, GS straddle. All these winners were above 10% and LLY was as high as 60%. I had losers NFLX  Calendar, FDX, CSX Calendar,Ual calendar and Qcom straddle and one big mistake where I held WBA  thru earnings while travelling and not been on top of the earnings dates.  Many thanks to all of the community for all your help.

[Kim 7,480]

@mccoyb53

You actually beat the official performance since our 14% is before commissions.. Well done! You are a live example what can someone achieve with commitment and determination.  

[IncomeTrader1 6]

I have been with SO from the beginning. That's 6 years. 

There is nothing like it - but it takes some time to start to fully appreciate it. I see some members complaining that they cannot get good fills after being members for just few weeks. I feel bad for them. They need to treat it as business and understand that good things take time to develop. But after you do similar setups for few cycles, you become familiar with the strategies, and learn to anticipate the next trades. Many veteran members post their trades in the unofficial forum - it's a great source of new trades.

My advice to new members: just stock around for at least 1 year. You won't regret it.

[drcruz 116]

I only started 1st week of Jan. 2018 and SO is allowing me to bring my trading to the next level.

 

After becoming extremely annoyed that I was hardly getting filled with any of the official trades with the exception of the losing trades like UAL and a couple of the SVXY trades (down $1600 at one point) I took matters into my own hands and thanks to @Kim documenting all his trades and @Christof+ with AOT I was able to reverse engineer a basic set of rules for the straddles and calendars.

 

And thanks to @Yowster, @RapperT, @Djtuxand @Maji I've been able to continuously fine tuning my rules. I think I'm only down about  $500 at this point. 

 

A big *Thank You* to Kim, the mentors and the community making  comments while I stick my neck out making my own trades.

Edited April 2, 2018 by drcruz