Oil trade closed out: +39.5% since October 1; one more step for NFA registration; promotion for new subcribers

The oil futures trade I had on finally cooperated a bit on Tuesday, getting down around $56, and I closed it out when the short call was finally showing a profit.

It bounced up to almost $59 after that but then dropped right back to the top of its previous range, closing at $57.93 on Friday afternoon.

So: sell 2 /CL $63 calls and 1 /CL $52 put, credit just over $1100, expiring January 15 (51 days, if you do this Monday).  Thank me later!

Navigation Trading continued to "outperform", booking almost all of the profit available on an AMZN trade:

He was short the 1717.5 put and the 1750 call, and closed midmorning today with only $25 of the $273 potential profit still on the table. Wahoo!

I was mistaken about having fulfilled the last requirement for NFA Commodity Trading Advisor ... there was one more:

Yes, I had to send a copy of my fingerprints to NFA so they can make sure I haven't been previously busted for financial crimes under another name, I guess ...

There is a  local fingerprinting business (who knew?) that apparently does enough of these to make a living ...

I sent in my copy via certified mail so I should have final approval by next week, I think!

Finally ... I'm offering a promotional incentive for anybody who signs up by December 1 (2019) ... Details here ...

More next week ...

First week of trading earnings: insights and lessons learned

I traded several earnings announcements this past week, including:

Overall I just about broke even, though my idea of using butterflies didn't work as well as I had hoped.

They just aren't wide enough; I can get much wider with Iron Condors or strangles (should I decide to try this undefined-risk trade ...)

Also their prices didn't seem to collapse as fast as the widely out-of-the-money options ... I had hoped that they would just be at least 15 or 20 percent lower priced on or near the opening, but that was too rare. I wound up just taking whatever small profit was there as soon as the market opened on these butterflies.

Also, the .16 delta Iron Condor for the high-priced AMZN was plenty profitable: I risked $350 to make $150 ... of which I took only $75, 6 minutes after the opening on Thursday ... that's over a 20 per cent return.

And I goofed and traded Paccar (PCAR) even though it doesn't have weekly options! I closed the position I had in my own account for a small loss but let this run in some other accounts I'm trading to see if I can get out for a profit early next week ...

Next week: GOOGL, CMG and CBOE, among others and I'll try applying these lessons to make a profit ...

I'll report back at week's end ...

A mixed week: nearly broke even but AMZN shows why cash-settled indices are better trading vehicles

I was short the 2860 SPX calls for Wednesday expiration, and was so pleased by its late move out of the money I took a screen shot to commemorate:

But AMZN wasn't so cooperative this week:

I was short the 1885 calls, and it looked bad enough on Thursday that it might go to 100% loss, up 30 points from the 1885 level. But it came down nicely and closed just in the money: 1886.30. Since I got $1.79 credit for the spread, that would have yielded a small profit, right?

Wrong! Unlike a cash-settled index (a lesson I learned in TSLA months ago on ThinkOrSwim), you just are on the hook for being short 100 shares of whatever stock you're trading against (per contract!)  ... in this case 1 contract = 100 shares x 1885 or $188500 I'd have to sell short and then buy back at whatever price I could stand. Most brokerages these days will close out the offending short strike before this happens.

So one can't just let it go to expiration and work it out from there as one can with cash-settled indices. I actually closed out the short 1885 calls earlier in the morning when the price had fallen to $1891 or so ... I couldn't see it necessarily falling further from there so just decided to close at that point.

Harrumph. Not as bad as working in one of their "fulfillment centers":

Anyway, with today's down move I got $3.80 credit on the Wednesday-expiring SPX trade, which had yielded only $2.50 last week.

I'm going to wait and see for Monday, but probably will just use SPX for the Monday to Friday trade ... for one thing it's "expiration week" next week meaning that the Fabulous NDX trade is available again so need to leave space for that one.

The trades so far:

Expiration	Underlying	Long put	Short put	Short call	Long call	Credit Received	Result
07/16/2018/	SPX	2680	2730	2810	2860	$3.60	Won 100%
07/18/2018/	SPX	2700	2750	2820	2870	$3.95	Won 100%
07/20/2018/	SPX	2700	2750	2835	2885	$2.40	Won 100%
07/20/2018 (a.m.)/	NDX	7260	7310	7410	7460	$5.99	Won 100%
07/25/2018	SPX	2705	2755	2835	2885	$2.40	lost 16% of amount at risk
07/27/2018	SPX	2695	2745	2825	2875	$3.50	Won 100%
07/30/2018	SPX	2720	2770	2850	2900	$2.60	Won 100%
08/01/2018	SPX	2730	2780	2870	2920	$2.15	Won 100%
08/03/2018	CMG	430	450	490	510	$1.01	Won 100%
08/03/2018	AMZN	1692.5	1722.5	1887.5	1917.5	$2.60	Won 100%
08/06/2018	SPX	2720	2770	2860	2910	$2.05	Won 100%
08/08/2018	SPX	2740	2790	2860	2910	$2.05	Won 100%
08/10/2018	RUT	1610	1640	1710	1740	$1.53	Won 100%
08/10/2018	AMZN	1737.50	1767.50	1885	1915	$1.79	Lost about 30%

That's 12 for 14 winners so far: 85.7% winners.

More next week ...

Near miss by falling burrito; Technical analysis update

I went to CMG this past week to get more credit, and just after I put on this trade:

A Chipotle outside Columbus Ohio on Monday 7/30/2018

I had sold the 450 put and bought a 430 put to limit the risk on that side to $20 (minus the credit I received: 98 cents) ... By the time I looked at it Monday morning, the stock was down to $429 (i.e. total loss) ....

But (a) no smoking gun was found and the store was reopened the next day, and CMG stock recovered all the way back, almost:

I think I'm going to stop trading CMG and TSLA and stick with AMZN only for an equity in this 4-5 day timeframe. Both CMG and TSLA have been periodically (and not just during earnings!) prone to these violent moves, CMG from perceived pathogens and TSLA depending on Elon Musk's latest tweet ... and the perceived safety or lack thereof in its cars.

AMZN controls the world ... or at least is so much more a diverse and huge company than either of these other two,  so it should be less vulnerable to this sort of move (IMHO) ... GOOGL is a possibility for this reason also.

And if I want to stick strictly with indexes, I can always use RUT and/or NDX ... both are slightly more volatile (i.e. they pay better!) than SPX. The SPX advantage is its 3 expirations per week ...

Technical Analysis Update

I read a couple of books after my TAC (Technical Analyst Colleague) predicted a Wednesday close almost exactly on the money 10 days ago. But I've concluded that while technical analysis may be valuable for some (including TAC), I don't think it's for me.

I closely read this book:

This guy is a fundamental analyst who reads a lot of newspapers ... I don't do fundamental analysis but I do like newspapers! So this rang a bell with me.

His take on Technical Analysis: Fuhgetaboutit ... gives numerous of examples of public predictions of TA practitioners not working.

Overall: a good book and very enjoyable to read.

Another book I merely skimmed so admit I may have missed something:

The author goes through a lot of space giving the scientific method and statistics and whatnot, all of which I was familiar with coming in and so just flipped through at high speed. 

His conclusion (also read at high speed so may have missed something) was that the only real evidence he could cite was the head-and-shoulders pattern 

... does work for trading futures, but he couldn't cite anything else that was proven to work.

All that being said, I do see traders that swear by TA and are apparently making money using it. So how is this possible?

One possibility is that the best of them have such experience in the markets and looking at the charts that they intuitively see what's coming and where to draw the channel lines, etc. Tim Knight is an example of this kind. In his Tastytrade show Last Call he spends 15 minutes on charts and apparently does well trading this way. But seeing where to put every stop isn't (apparently) one can program ...

Best of luck to all technicians out there, including my colleague TAC, but I think I can win without being a technician myself.

Results chart after this week's trades:

Expiration	Underlying	Long put	Short put	Short call	Long call	Credit Received	Result
07/16/2018/	SPX	2680	2730	2810	2860	$3.60	Won 100%
07/18/2018/	SPX	2700	2750	2820	2870	$3.95	Won 100%
07/20/2018/	SPX	2700	2750	2835	2885	$2.40	Won 100%
07/20/2018 (a.m.)/	NDX	7260	7310	7410	7460	$5.99	Won 100%
07/25/2018	SPX	2705	2755	2835	2885	$2.40	lost 16% of amount at risk
07/27/2018	SPX	2695	2745	2825	2875	$3.50	Won 100%
07/30/2018	SPX	2720	2770	2850	2900	$2.60	Won 100%
08/01/2018	SPX	2730	2780	2870	2920	$2.15	Won 100%
08/03/2018	CMG	430	450	490	510	$1.01	Won 100%
08/03/2018	AMZN	1692.5	1722.5	1887.5	1917.5	$2.60	Won 100%

9 for 10 winners (90%) and the loser only lost 16% ... may present trends continue! More next week ...

Slow learner I am (the right way to get more credit); Amazing Technical Analysis or just lucky?

I went back to "no rolling" last week as regular readers will remember. But I didn't move the short call strike back out to the .08 delta, and was bitten by this for Wednesday expiration. (I didn't have a Monday-expiring trade on this week as I had done the Thursday NDX a.m. settled one last week instead of the normal Wednesday to Monday one.)

And the market bit me on Wednesday; I was short the 2835 call but we had a spike late Wednesday the ran the close up to 2846. It was Trump:

... claiming a deal:

Fortunately the wider "wings" proved their worth; this was only a 16% loss (on the amount at risk) instead of the 100% it would have been if the wings had been 5 or 10 points wide.

I must be a slow learner sometime ...

I got away with it this time, having sold the 2825 call expiring today (July 27) ... but that was the .16 delta ... if not for the (moderately) sharp downturn today I'd have lost this one too.

I was just trying to get a little more credit ... $3.60 (7.8%)  instead of $2.40  (5.0%) or so ... That's OK but this is the wrong way to accomplish this.

The SPX is in record high territory, making its volatility (and therefore the credit we get with these trades) very low.

But there are other underlyings; AMZN, TSLA, CMG that could be used on the Monday -> Friday trade at least, possibly on the Friday to Wednesday trade also (closing early) ... Let's look at the returns these give! All of these are current (Sunday afternoon 7/29) prices and are the wiiide .10 put and .08 call spreads, with wings sized proportionally to the SPX 50-point wings

AMZN with 30-point wings gives 2.50 or so, about 9.1%.

CMG with 15-point wings gives 0.85 or so, about 6%.

TSLA with 15-point wings give 1.65 or so, around 12.1%.

So I'm going to use one of these for at least one of the three trades per week while SPX volatility is so washed out, and for the SPX trades I'm going to stick with the .10/.08 deltas, cheap though they may be.

---

I've generally been ignoring technical analysis, thinking it not useful for what I'm doing and generally that there should be no connection between chart patterns and future prices (other than what chartists inject into the market in "it looks like a head and shoulders top so I should sell!"

But an amazing (or just lucky?) bit of technical analysis this week by a colleague ... He predicted: S&P close around 2845 on Wednesday and a pullback after that ...

Closing price on Wednesday was 2846 ... only after the Trump Deal To Make A Deal announcement late in the trading day ... So what happened? How is TAC (Technical Analyst Colleague) doing this?

• He just got lucky
• He's actually psychic and just uses the chart info the way psychic readers use palmistry or Tarot cards
• There's some deep connection between the charts and underlying reality and the quantum level

Anyway, I'm reading up on the subject to figure this out and will have book reviews later in the week.

---

Here's the result chart so far:

Expiration	Underlying	Long put	Short put	Short call	Long call	Credit Received	Result
07/16/2018/	SPX	2680	2730	2810	2860	$3.60	Won 100%
07/18/2018/	SPX	2700	2750	2820	2870	$3.95	Won 100%
07/20/2018/	SPX	2700	2750	2835	2885	$2.40	Won 100%
07/20/2018 (a.m.)/	NDX	7260	7310	7410	7460	$5.99	Won 100%
07/25/2018	SPX	2705	2755	2835	2885	$2.40	lost 16% of amount at risk
07/27/2018	SPX	2695	2745	2825	2875	$3.50	Won 100%
07/30/2018	SPX	2720	2770	2850	2900	$2.60	Still open
08/01/2018	SPX	2730	2780	2870	2920	$2.15	Still open

Totals: 5 wins, 1 loss (83.3%), 2 still open. More next week ...

It didn't take a meteor strike ... the next 100 trades from here

I had a less than perfect week trading ...

I had previously posted that I shouldn't lose 30% for anything but a meteor strike or terrorist attack.
But a couple of cascading errors had the same effect.

First of all I have to remind myself:

ANYTHING CAN HAPPEN AT ANY TIME!

I started last Sunday thinking for sure the market would be down with the latest trade war stuff going on ... I shorted the S&P futures at the open last Sunday afternoon and it went straight up from there.

I finally closed it Monday a.m. for a $1000 loss, bringing my scalping results just below even (-$40) for the year so far.

I compounded the problem early Monday a.m. by selling too-close call spreads, which went 'in the money' almost immediately.

Finally, I was thinking that I could move my short strikes closer (1 standard deviation instead of the .10 delta) and just roll my way out of any problem, based on my experience rolling 'straight across' last month.

Not so this one either ... then I made one final error ... I was hearing from all quarters about the technical indicators pointing straight up at least until Friday the 13th. So instead of holding on for a down move (which finally came Wednesday) I sold at a loss on Tuesday ...

So adjustments from here:

• I'm moving back out to at least the .10 delta, except in cases where we're right at record highs (like now). In that case I'm willing to sell the call short strike just above the record high, if at least 20 points away from the money currently.
• I'm making the 'wings' of the iron condors I'm selling even wider, going from 30 points to 50 points for SPX, with proportionally as wide wings for other trading vehicles like AMZN and TSLA.
• I'm mostly going to give up rolling. The success I had before this incident was an unusual situation, I reckon, so I am going back to 'set it and forget it'.
• I'm ignoring technical analysis ... except, as mentioned above, I expect 'resistance' at record highs

How this works in practice .... I have two trades (plus a scalp) on currently:

Expiring Monday the 16th:

          1 SPX 2680 put

         -1 SPX 2730 put

         -1 SPX 2810 call

          1 SPX 2860 call

Expiring Wednesday the 18th:

          1 SPX 2700 put

         -1 SPX 2750 put

         -1 SPX 2820 call

          1 SPX 2870 call

I expect both of these to win ... credit was $3.60 for the first and $3.95 for the second,  7.7% and 8.6% return, respectively.

My next 100 trades will be based on these parameters, and I'll track the statistics carefully as always.

(And the scalp: 1 short /ES future from 2806 on Friday ... I'll take this off on Sunday afternoon or Monday, a.m. for at least a small profit, I think.)

I expect the main SPX trade to work 90% or more of the time, but even when it doesn't the wide wings should make the losses generally much less than 50%. For example, even if the market zooms up past 2810 for Monday's close, how far will it go? 2820? Breakeven is actually 2813.60, so that's only a 15.9% loss ... versus 100% if we used 5-point wings.

More next week ...

Fat-fingered trade leads to profitable insight

I typically put on all trades with the same strikes for the few accounts I'm trading for. But week before last, I wound up with one account short the 2770/2800 call spread in SPX, when no other account had this.

Anyway, I rolled this out 2 days when it was in the money, but just "straight across" (same strikes,  not further away from the money),  thinking that since the market top was something like 2809 months ago and we have plenty of trade war pressure that it would come in a few points any time ...

But it didn't for several expirations (Monday, Wednesday, Friday) for SPX and I kept rolling it ... and making around $2000 every couple of days in this account (on 4 contracts, risking about $10000) ...

I finally figured out what was happening and that I needn't limit this to the fat-fingered account but could get my other accounts in on this profitable action.

So for as long as this lasts I'm going to run this trade "until my hands bleed"  (as Sosnoff would say ...)

What could go wrong?

First, the market could burst way up past 2800. I'll be really, really surprised if this happens ... but I should be able to roll 'up and out' and still for a small credit several times to make sure this ends profitably.

The other possibility:

If this happens, volatility spikes and I can go back to the previous system and make a better return than I have been making previously.

But the lovely thing about just selling this call spread without the (much less profitable) put spread (because it's further away) ... We're then immune to the "meteor strike" problem ... so I am going to bump up the risk a bit to 25%/25%/25% (so 75% will be "in play" for a few hours Monday, Wednesday and Friday) ...

Otherwise this week: AMZN behaved, returning about 5.7% on risk ...

Here's to further sideways action!

A tough week ... Sosnoff proved right again and rolling clarified

I tried Amazon for the Monday-Friday trade, and by Wednesday it looked dead:

But I was short the 1697.5 calls, and it settled back between 1683 (where it closed on Friday) and 1690 after Thursday. So it paid off for full profit.

SPX wasn't so good:

It went straight up 40 points ... pulling back a little on Thursday before bouncing back up to the top on Friday.

I'm short the 2785 calls for Monday expiration, so right now it looks a little too exciting ...

As for the question I had last week about rolling: Tom Sosnoff recommended in email that I stick with wider strikes, but I thought I could narrow the strikes if I intended to roll losing trades.

Wrong! It's much easier to roll for a credit with wider strikes, and much easier to get further away from the money on the roll.

I'm actually wondering about the value of rolling at all with wide strikes ... Shouldn't I just take the (small) losses and move on? I can still roll anything that looks like it's going to lose big, and will have to roll anything that isn't cash-settled (as AMZN this past week was looking to lose I got a bunch of emails from Tastyworks saying they might have to take action to close the trade ... I assured them I was watching! and it worked out anyway ...)

But let's look at the profitability of the SPX trade without rolling (and with 30-wide wings) ... currently it's something like 20 wins, 4 losses: 83.33% ... and the wins average probably 6% of the amount risked, losses average maybe 25% ... Monte carlo results with these parameters & risking 20% of the account on each trade ... is not good enough (mean up not quite 100% over about 3 years) ...

But: (1) volatility is back to the bottom so I should be making more than 6% when it returns and (2) I've only been running this system for several weeks and still easily could be better than 90% win and (3) there are some other trades that are part of the deal, notably the Fabulous Almost Always works NDX a.m. settled one, coming up again this coming week ...

And finally: I tried scalping /ES futures for the first time starting Friday, and so far so good ... up several hundred dollars on a 1-lot of several little scalps.

Tomorrow I'm going to try the Amazon trade again ... fingers crossed!

Another 100% winning week ... profit of over 3.9% on the biggest account I'm trading

It was a zig-zag week that stayed enough in a range to pay off without anything extra required:

I was thinking after Tuesday I needed to be ready to roll on Wednesday, but no such problem ... then after the "trade war restart" late Thursday I was expecting a sharply down day ... but instead I guess the jobs report was too thrilling ...

Anyway, it's June 1 and I'm going to make a couple of small changes to the system for this month:

• I'm going to take a little more risk, around 20% of the account on each trade. This means that there will be 40% of the account in play most of the time, and 60% in the few hours of Monday, Wednesday and Friday when all 3 trades are active at once.
• I'm going to mix in some relatively more volatile individual stocks for the Monday to Friday trades, starting with Amazon this coming Monday. I'll also look at TSLA, CMG and a few others.

And the other change I started on in May that I'm absolutely going to keep: I'm going to be absolutely ready to roll any trade that seems to need it near expiration on Monday, Wednesday and Friday.

(A question that then occurs: if one is ready to roll any potentially losing trade, why widen the strikes?)

And I'm going to experiment with a big change in my own account; my agreement with others keeps me from doing this for them. I'm going to try selling strangles (i.e. a naked call and a naked put) on some earnings announcements.

I was looking at Costco, which had earnings this past week ... I actually tried to get on an Iron Condor trade just before the close but couldn't get filled. But just for kicks I tried looking at the strangle later ...

Costco's price is around $200, and I didn't realize that the margining for naked options was so small ... around $3000. The credit for a relatively wide strangle was $5.63 (i.e. $563), which amounted to 13.5% if held to expiration (and probably 10% if you took it off at first crack of the market the next day).  And in fact this would have paid off, as Costco went nowhere after the announcement.

I'll pick my spot on these, but this should make a nice extra boost in returns and doesn't seem superbly risky for a 1-lot ...

More next week ....

Back on track and considering the value of rolling

I lost my 3rd trade in a row on Monday's expiration (details below), but since then:

• 2 SPX expirations, both winners
• the Fabulous NDX a.m. settlement trade was also available this week, winning again

About that third loss in a row: the short SPX strike for Monday the 14th was at 2720 ... the futures market was up all night and the market came back during the day, but not enough. It closed at 2730.13, a 30% or so loser (since the wings were $30 wide; I was long the 2750 call).

But the next day the market was down into the right range, closing at 2711, and only up to 2722 on Wednesday the 16th. So if I had rolled the call wing out and up to short 2730 and long 2760 for Wednesday expiration (for an extra small credit), that would have worked. Alternatively, I could have rolled laterally (sticking with 2720/2750 strikes) out to Wednesday (larger credit) and rolled again to Friday when that showed problems for Wednesday. Friday close was back to 2712, so that also would have worked for full profit.

I hope not to have to put this into practice for the rest of the month ... there are only 5 more expirations in may and I'd just as soon have them all expire worthless without rolling.

But I'm comfortable taking more risk with the rolling strategy on the call side; if the "meteor strike" comes while this extra trade is on, all it does is reduce the overall loss. The "put wing" will already have expired worthless, so an extra one of these rolling for profitability is OK.

Another change I'm considering for next month: substituting certain relatively volatile underlyings (AMZN, TSLA, etc.) for the Monday->Friday trade. This should make a bit more money than doing the trade on SPX at its currently depressed volatility.

The rolling ability for this kind of back-and-forth market is metaphorically a protection for our new growth:

More next week!

OK, up 4% this week ... and implications if we can do this regularly (I think so!)

I am sticking to the plan I posted last week; this week I put on SPX .10 delta iron condors Monday, Wednesday and Friday and an AMZN one on Monday too.

The SPX trades expiring Friday and Monday looked a little scary until this happened Thursday afternoon:

This kept the SPX from getting too close to my short strikes (2685 for Monday) ... AMZN also was down into the wide open spaces just north of 1400.

So overall the biggest account I'm trading was up 4% for the week. I'm just getting started with this system, but I firmly believe that this can work 90% or more of the time. (I've done 4 of these so far: all winners.)

If this works 10 weeks in a row, that's a 48% from the starting point; I'm visualizing that!

And the implication if one can do this regularly: $200000 is plenty to retire in style on. If you're taking 1/3 ($66666.67) and you make 12 to 15% on that  a week (easily doable with current volatility), that's ... $8000 to $10000. Take $6000 of that, save the other $2000 to $4000 against losses ... that's $25K per month.

Enjoy!

More next week ...

Update: the .10 delta is just the ticket

A condor (or strangle) at the .10 delta for the short strikes is wiiiiiiide ...

This week was extraordinarily volatile, but still the .10 delta SPX trades (even one that I made at .12 delta) were barely tested. Not only that:

AMZN was down $100 on Wednesday after a Trump tweet claiming they didn't pay enough taxes. This whacked the 1 standard deviation condor I had on, but had I used the .10 delta even this would have expired worthless!

TSLA had similar troubles and results: a loss at 1 standard deviation but a win if put on at the .10 delta.

So here's my trading plan:

• continue using the 1 standard deviation condor with NDX a.m. settlement when it's available once per month; I put this on around 9:45 or 10am Pacific
• otherwise put on an SPX trade .10 delta condor every Monday, Wednesday and Friday, 4-5 DTE
• Supplement with high-IV underlyings like AMZN and TSLA and CMG ... all at .10 delta short strikes

That should do it ... more results next week ...

Maybe Karen the Supertrader was on to something: 1 Standard Dev isn't enough!

First, the AMZN trade that looked to be "risk 1 to make 1.41" turned out to be an end-of-day pricing anomaly that I didn't see this week. But I did put on a 6-day (since Good Friday is a market day off next week) 1 standard deviation Iron Condor on AMZN today anyway ...

I have been watching TastyTrade for several years ... you can just search YouTube for their conversations with "Karen the Supertrader."

One of her key strategies is going wider on credit spreads than 1 standard deviation. Based on what I've seen from my SPX trades over these first several, that's just what I need to do. I barely lost the one ending earlier today; the 1 standard deviation short strike was at 2590 ... but SPX closed at 2588.26. Not a total loss (since the spread was 5 dollars wide, but just a small L in the record.)

But clearly if I'd gone just 1 strike wider, this L becomes a W. And the VIX closed today at 24.78, making a spread with the short delta options at the .10 delta rather than .16 still return around 17% when held to expiration. And that should bring the win rate up to 90% at least; the Kelly Criterion run on those numbers suggests risking 31% of one's stake on such a trade.

I'm going into "production" next week with this .10 delta trade risking 10% of the accounts I'm running for the first 8 or 10 trades, then possibly move up to 1/2 Kelly after that ...

And as for SPX, so for AMZN and TSLA; I'm going to try them with .10 deltas too.

Here we go ....

NDX trade wins again! (14 for 15? I've lost track!) Also: AMZN?

This was "expiration week" meaning the NDX was once again a.m. settled. I put it on again, and again it worked ...

Volatility was still up a bit, so I got from $1.60 to $2.29 credit, which is 29.7% on the $2.29 credit.

I put on the SPX Friday to Monday trade again and so far so good. But its volatility is pretty low and watching TastyTrade I just got another idea ... AMZN.

Yes, Amazon.com ... it's priced high enough that one can go waaaay out to the wings and still get a reasonable credit. But if you take a not quite so way out upper wing (16 delta) and a 5 delta lower wing, look what you get (on a 1-week trade):

That's right: risk 1.05 to make 1.5 (if held to expiration). This should work at least 70 percent of the time, and putting this into our Kelly Criterion calculator gives:

Translation: a trade that works 70% of the time, returning 1.41125 of the amount at risk would be maximally profitable over time if you risk 48.7% of your account on this trade ... 24.3% for half kelly, which is plenty profitable and less volatile for my tastes.

Anyway, I'll have to try one of these next week ...