Hey Guys,
The market was showing strength in the early part of the day yesterday, and then it dropped like a rock. Right now the S&P 500 is around 4,450, which is about 75 points down from its peak yesterday.
The timing of that drop was not good for my options positions since I had so many reach their time limits at the end of the day yesterday. I was fortunate to hit a couple profit targets early in the day, but aside from that, it was a rough day. I lost on a number of trades, and a handful of them were essentially full-sized losses.
With the options trades in particular, I'm going pedal to the metal and being aggressive with position size. This week showed what it feels like when there are multiple losses and demonstrates the risk involved. The aggressive position size has paid off handsomely at times, but this week it didn't, and it offers a good opportunity to evaluate your comfort level with whatever position sizing you're using. Based on back tests and personal experience, I can say that there might be more weeks like this in the future. And to be able to earn the potential reward of this trading approach requires living through drawdowns like this, so using a position size that you can live with is important.
I picked up some new positions today. In the main account, I bought stock for CB and LRCX. In the options account, I bought options for STZ and AZN.
If you have any questions or feedback, I'd love to hear from you.