July Returns: +44.25% 6 wins 1 loss

July more than made up for the lack luster May and June (although not bad just not great) thanks mostly to the two short Iron Butterflies I sold a couple of months ago in JEC and MON.  Both moved against me in the last 2 weeks as the market got jumpy but I followed my trading rules and got out at the right times locking in nice profits.

My other positons paid off nicely accept a BRPS in AMT which I was looking nice with until they got upgraded.  Oh well, not a bad loss.  The others were profitable nicely thanks mostly to selling my bread and butter spreads in SPY, WMT and a couple of new trades in NKE and PALM.

I’m doing well in refining my “1-3 swing for the fences” trading style.  I’ve been reading how many people suggest having at least one big trade for each three singles trades you put on.  That means taking on more risk than most trades but the reward is much larger than most trades.  It’s been working nicely and I’ve been doing it through selling high beta, high vol.  via Iron Butterfies.  This might change since IV is coming down to earth again.  I will find another vehicle if IV comes down too low.

June Returns: +9.33%

Wow what a rollercoaster ride this last expiry.   I had one big loser which dragged down my returns and was a winner up to about a week before expiry.   I had an IC  $30,40-50,60 June on for CPLA which I sold 3 months ago.  The stock did what I wanted for the first 2 months then it started to creep up to $50.  In the last 3 weeks it stayed in the low 50s for much of the time.

So what happened?   I didn’t follow one of my trading rules for ICs which is close them out at least 5 days ahead of expiry.   My plan was to close it out on Thrusday week which would have been correct.   However, on thurs the stock jumped to $54 and I felt it was on no news and it would fall back over a couple of days.  Also $54 was very close to break even so I wanted to try to regain a few more dollars back.

On Monday the stock drifted up again and I waited and on Tuesday in jumped to $58, very close to my max loss.  Gamma was killing me and thus too late to get out so I waited until Thursday morning and the stock moved back to 57 and I got out with a $4.60 loss.

The hard lesson here is I tied up a good chunk of margin for 3 months for this trade, had a profit all the way until the last week when I got slammed.  Had I followed my rules I would have gained a small amount instead of losing money.

I had a couple of other small losers but had a couple of very nice winners so overall a nearly 10% gain for the month is ok.

Time to move on and make some money.