Hey Guys,
The market is still down. It's hanging out in a zone that's near where it closed after its big red day.
AWK is the main stock position that's really hurting, but most of my other stock positions are actually hanging in there. My options account is where I'm feeling the pain right now, and it's largely because I have so much exposure in the Healthcare industry. The healthcare stocks are getting hammered this week. If that industry turns around in the next several days, I will get a nice ride since I have so many positions tied to it.
One thing worth pointing out about my options trades it that I buy options that are close to their expirations, and because of that their valuation swings can be volatile. We saw that this week with Pfizer, where at one point we had more than a 100% gain on the option position and it wasn't even halfway to its profit target, and then by the close of yesterday it had turned into a loss even though the stock price didn't make a particularly dramatic move. On weeks like this, it can be agonizing because the options account can have a big negative shift in value. But not all weeks are like this, and it certainly goes the other way. The winning weeks can be really big too. If the volatility swings of the options trades are too intense, you can always dial down your position size. The key is to be at a position size where you can mentally and emotionally endure the periods of losses in order to be able to stick to the trading plan long term.
I picked up new positions today. In the main account, I got stock positions for PAYX and WTRG. It gave me some nice diversity away from healthcare. I also bought another futures position and posted its stock equivalent using the SPXL ticker (for those interested, it was for strategy MT 95, the same one that triggered last week).
In the extra options account, the only trades that set up so far were for healthcare companies, so I took them to stay in line with the back-tested approach. Those were for HCA and CVS. In the low-priced account, I picked up stock shares of GoDaddy and Activision.
If you have any questions or feedback, I'd love to hear from you.