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closed Positions

xli: 02.25.20 – 05.15.20

ETF | Industrial Fund | Status: Closed

Closing Trade

View original trade
05.15.20
Today, the share price happened to be directly between my
and my
have both
quite nicely. Since
to June, I've made back about $140 on this thing. With that in mind, I've decided to shut this position down to lock in my gains (regains XX). I may reestablish a new position in XLI next week if an interesting opportunity presents itself. This has been one of the worst
positions I've ever had. The share price constantly exceeded
in both directions and had me chasing my tail for weeks. It was very frustrating. This position was the final remaining loser I had leftover from the initial coronavirus meltdown. It is an ugly loser and I'm glad to finally be done with it. I look forward to being able to start again fresh to continue to make back losses.
Just like my other ugly trades from the meltdown, my final
actually turned out much better than it could have if I'd just purchased 100 shares from the beginning. XLI was trading for $78.34 back when I first jumped in. Had I purchased 100 shares, I'd currently have a $1,908 loser. Instead, with the help of my defensive tactics, I've managed to contain it to a $780 loser. Yes, that totally sucks for me – but it could have sucked about $1,128 more! Admittedly, I probably let this particular position get a little too big for my account size. Still, I stuck to my guns and eased this total disaster of a trade back down to more manageable levels.
As rough as the past couple months have been, I've learned a lot about risk management in a general market crash which is something you definitely have to experience to fully understand. There's aren't enough textbooks in the world to truly express what it is like. The hardest part about this whole mess was having to deal with several big losers all at once. I've had trades go horribly wrong before, but never everything at the same time. I picked up a couple new management techniques for my arsenal, and feel good and prepared for whatever comes next! If there's any one thing that helped me find my way, it was paying close attention to
levels. Without knowing which way the market may turn, relying on extrinsic value decay has been a total life saver. It helps me make faster decisions, and know when to be patient and when to take action. If you are learning how to trade options yourself, extrinsic value is absolutely one of the most helpful concepts to study.

Risk Profile:

Figure 13

Strategy: Close Position

btc 1 jun 19 57 put
btc 1 jun 19 63 call
Fill Price: $2.92 debit

Position Analysis

U/L Price: $59.26
IV: 42.3%
IVR: 38.5
Liquidity: 4/4
Final P/L: $7.80 Loser

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