Leaderboard

Haven't reported much on individual stocks, but I closed AMAT yesterday for 30.4% gain after commissions (I think my entry and exit was well-timed, but that was just luck). Also closed TJX 70 Dec call yesterday for 13.4% gain and HD 167.5/180 Dec1 call spread (in lieu of straight call) for 6.1% loss. Opened the ADI 92.5 Dec15 call this morning on a little dip for $1.46 (it went lower after my entry)

I don't think that what caused your problems were that it was stocks as opposed to other underlyings. The whole issue here is that you were playing with virtually all negative gamma. You can't have the shorts 1-3 days out, and longs 2 weeks away. It's really a bad combination. In these trades, negative gamma is your biggest enemy. I would go much further out and try testing this again. Sell something around 2-3 weeks out, then, depending on the pricing of the calendar, you go about figuring out where the longs should be. Just off the top of my head, something like short 2-3 weeks out, and long 2-4 weeks after that. And, if possible, always try to have at least 1 of the legs be a monthly. Ideally a 4 week calendar, where both legs are monthlies, and the short leg is at least 2-3 weeks away. I think you were using the wrong setup for your test. Obviously you want the largest difference between your 2 gamma numbers...shorts decaying at a much faster pace than the longs. But, selling extremely short term options is definitely the wrong way to get there.