Dancing with the one (NDX) that brung me, maybe?

I settled on the a.m. settled NDX trade earlier this year as the only trade I'd need to do. But the 4-day NDX p.m. settled one (at .08 short delta) is now 3 for 3 and should win in the 90% range or better, I think.

I tested one again this week, and an acid test it was, with the market sharply down Monday and Tuesday:

The down move finally paused on Wednesday and I should really have taken the trade off for 90% of its profit, but I missed that opportunity and just let it run through expiration Friday, where it expired worthless with plenty of room left (short 6400 puts; closed at 6527). Profit was $1176 on a risk of $13824: 8.5% for 4 days. Not bad!

Otherwise ... I closed out the /ES short positions after the market hit 2655 ... I thought that was enough of  a down move and I didn't want to lose $100 point when it started to go up. But I was early! I left $2000 on the table and it was down 17 again on Friday closing at 2632 ... so I certainly could have held on for a while longer.

It wasn't anything to do with Brexit, but AAPL:

Finally, the Golden Butterfly paid off handsomely:

Gold futures went nowhere after I put the trade on last Sunday evening ... Tastyworks still doesn't support Good 'Til Cancelled orders, which worked to my benefit on this one. I sold the spread for $10.20 and would have bought it back for $7.65 (1/4 of the credit for this kind of trade), but by the time I looked at it was down in the $5.50 range and I got it filled for $5.60, almost double what I was expecting.

Overall a great week for the good guys ... your $200,000 account was up another $15000!

More next week ...

The joy of being short ... at the right time! (Your $200,000 account: up $18K!)

The down move came a week late, but what a move:

I held on to my two short futures contracts and sold 4 2670 puts against it for just the couple of days ending Friday. I have two remaining that expire next Friday the 23rd.

I've been enamored of the idea of selling puts against a short position, sometimes to my detriment. But despite the prospect of a typical Santa Claus Rally,

I think there's enough weirdness around with Brexit

... and of course the ongoing shenanigans in Washington:

That it seems a lot more likely to me that we'll get a more nearly flat market ... which will be perfect for what I'm planning:

(1) Continuing to sell 2 (at least!) puts against my 2 short /ES futures contracts ... occasionally I may sell an extra couple, as I did last week for a couple of days ...

(2) NDX: 4-day Iron Condor, Monday to Friday, short strikes at the .08 delta (i.e. waay out wide) and at least 50 or 60 point wide wings.

(3) A mix of commodity futures, including the Golden Butterfly since I finally remembered the adjustment of selling another one! This worked well (I made $500 in a couple of weeks) the last time I tried this.

Your $200,000 account was up about $18000 last week ... Wahoo!

I give up (mostly) predicting market direction after a near miss this week

I thought that since the Democrats were widely expected to take the House of Representatives that that would be negative for the market. So on Monday I sold 1 /ES future short at 2722.25.

Unfortunately:

On Wednesday midday with the market continuing to soar, I sold another /ES futures contract short at 2801.50, thinking what a great opportunity that was. It wasn't until Friday, until the market went down below 2780, closing at 2778.75.

Unfortunately the SPX closes at 1 PST and not 2 PST along with the /ES futures, so it missed a couple of points of down move.  This is an issue because I'd also sold short the 2775/2785 call spread in SPX, for $2.50 to $2.55 credit. So loss closing at 2781.01 was $351 for a one-lot, less than half of what it could have been (and that I was resigned to on Wednesday ...)

We're now in position to do what I've tried to do previously when NOT in this position: sell puts against short futures contracts. I have two on right now (expiring Friday Nov 16) and can sell two for the next few weeks at least (I think!) for $1000 or more per week.

(Note: this doesn't mean $1000 profit per week. Depends on the movement of the underlying futures price. I'm ahead on the one I sold short at 2801.50 and behind on the one I sold at 2722.25).  Effectively I'm "reducing the basis" of these ... if I sell one put for $500, that's 10 points for /ES futures, effectively as if I'd sold the losing short at 2732.25 instead of 2722.25 ...

In other action ...

I've continued to sell futures options strangles and butterflies, small, and mostly have won on these. In fact I made $500 on yet another gold (/GC) butterfly with an adjustment I remembered from Dan Sheridan's butterfly guy Mark Fenton: you just sell another butterfly:

This worked beautifully and I'm going to continue to experiment with it.

But I think NDX can continue to be the "bread and butter" trade ... It's "expiration week" coming up this week on the 16th, where NDX settles in the a.m. instead of the p.m. So I'm going to load up on this trade again, at 9:45 a.m. PST Thursday:  "one standard deviation" Iron Condors with very wide wings. That's short at the .16 delta and long 50 to 70 points away.

On "non-expiration" weeks I think the .08 delta NDX trade from Monday to Friday should work at least as well: 91.7% for the a.m. settlement and I'm assuming at least 90% for the Monday-to-Friday p.m. settled trade.

More next week ....

NDX 2 and 0, SPX 1 and 1 ... futures mostly still winning; AAPL wipes out a millenial

Volatility calmed down a bit this week (the Vix was down, closing at 19.15). Our friend NDX:

... was still volatile enough to pay well ($4.38 on a 1-lot, with short strikes at 6475 and 7270) ... it never got near those short strikes and I held it to expiration today for its full $438.

On the S&P 500 I moved to SPY and just sold a strangle for "78 cents" way out wide ... and closed it a day early, just taking $68 of the $78 dollars I would have gotten on that one.

If these two trades really pay off 90% of the time, with "wide wings" I should be able to make a good living trading them (along with the once per month a.m. settled NDX trade) ... fingers crossed!

The futures trades I have on are mostly paying off, still, but they mostly don't have frequent enough expirations to use like the NDX and SPX trades we're trying ... but I'm leaving them on this week because they shouldn't be too troubled by....

Next week is the U.S. election, and with the Democrats all but sure to win the house and the market today only holding up a little bit at the end because of this:

Trump says 'I think we'll make a deal with China' on trade

But this was seen as just a transparent attempt to prop up the stock market before the election ... which gave me a chance to sell /ES futures contracts around 2722 when they bounced late in the day.

Everybody in the world is expecting the Democrats will take the House of Representatives this election, which will mean only one thing for the market:

I am thus staying out of the neutral trades this week and instead just sold futures contracts and a 'bear call spread' on SPX in the non-futures-capable accounts I am trading. (These return about 30% for the week all by themselves.)

Finally, AAPL told the world that they aren't going to report sales numbers anymore, and that was not popular:

Tim Knight reported that one millenial who's gotten used to putting everything into this trade got wiped out this time ...

Let's be prudent out there ... more next week!