As a working single mother of two tiny ones (5 and 2.5 years old) I don’t have time to both enjoy time with my kids and be stressed out over the market movements. So when I trade I have to really have a clear thesis of my expectations and be willing to give the price enough time to do what I think it’ll do.

I like to trade strategies that are either quick Open and Close, or where I can take advantage of theta and veta decay against short positions. In such choppy markets, I’ve found that Iron Condors can be extremely profitable as day in and out it’s quite realistic to see 5 days of price action in 1 or 2 days. The fast movement in the price action aggressively decays the credit spread with the losing deltas, and a day or two later the price would turn around moving away from the remaining spread. Allowing you to close a new losing side, while re-opening the spread you closed the day before for a higher credit because of the increasing deltas.

For the last month, I’ve been doing this ’90’s Body Roll’ version of moving in and out of Call and Put Credit spreads, like teenagers grinding to Aaliyah at homecoming. Yes, I’m showing my age, and Yes I’m re-living the best moments of ‘Fresh off the Boat’.

However, Amazon has made me do a bit more babysitting of positions than I like, or I’m used to. Amazon’s Thursday drop to Dante’s 12th Circle of Hell, decayed all my Call Credit Spreads. But, with the fast movement, my closing orders were never filled. I was a bit (extremely!) frustrated as I was not sure what would happen over earnings.

Of course then like an Olympic gymnast Amazon looked like it was trying to Simone Biles to new heights! So, on the Friday I closed my Put Credit Spread side of my Iron Condors quite profitability, but was now faced with developing my thesis regarding my call side spreads which were now basically: In The Money!

So, as the Friday opened and progressed, I needed to watch the changes in Open Interest. I was unsure how Friday would really unfold when 60,000 short puts entered the market slowly over first hour, an institution trying to aggressively hedge their shares! However, I felt confident we would finally see a drop when those same 60,000 puts were closed an hour before closing. A cheeky Institution knew they could sell a heavy FISTED put side to inflate price aggressively, but once the price reached their sell price, they slowly started dumping their shares for the last two and half hours of the day. And then, when their puts were nearly worthless they cut the cord, eliminating that down side support area. When those 60,000 short puts closed in the blink of an eye, they let price humiliate itself!

However, the price drop was SO late into the Friday market that my Call Credit Spreads didn’t close. Now in all honesty I still have time, so I told myself to just rest well evaluate the moving averages, the sectoral strength, and other indicators, but what was VERY telling was that the Open Interest on next Friday’s expiration February 11t could be better described as none, than slim.

So lets talk about Yesterday, Monday…

Monday’s open was like Gangbusters in a Scorsese Film, and NOT what I wanted. Of course, to add Fus to Tration, Monday my kids were home because there was a Positive Covid case at their Montessori school, and it was raining like Climate Change was the Dark Cloud over our home. So by Monday, we had been trapped in the house for 3 full days and my kids were having NONE of it. Their madness coupled with my ‘What the Heck…’ made for a moment of total frustration. However, the charts were NOT giving me an overall bullish feel to: XLY, Amazon or the general markets, so I had to just be patient. So instead of punishing my trading account with unnecessary losses, I put on Twinkle Twinkle Little Stars, and our little planetarium lights, and just layed with the kids in darkness until the ‘tangled feelings of Exhaustion / Frustration’ passed.

When I walked back to the screen it was clear, at least for that trading session we would move back towards the opening price. And now… like RhiRhi said… “You’re a Shooting Star I see” at market close on Monday, and turning what looked like a Demand or Support Area into a likely resistance. Amazon’s great earnings are keeping me on my charting game, but I’m liking my odds of getting high premium on new put credit spreads and eventually be able to close those darned Call Credit Spreads that were now Out The Money, but I’d like to decay further.

So like we say in Germany, I handled my nerves #LikeABosch!

Trading Strategies and Time

Post navigation

Leave a Reply

Your email address will not be published. Required fields are marked *