Discretionary Update

Closed long CVX position. I utilized the 65/70/85 Call Butterfly purchased at 1.55 and sold at 1.80 for 16% gain on equity. I won’t count this position on performance because it was a pseudo test trade for execution and duration testing. Basically I wanted to see how the displaced 85 wing with minimal liquidity effected the execution. I also wanted to see the sensitivity a few weeks from expiry since BFLY’s are time sensitive. All in all a succesful trade that I will try to utilize more of.

Conversely I am getting absolutely slaughtered in VXX. My initial entry was way too aggressive, incidentally the system had a much better entry price and may probably end up with a profit on this position. For those with large pads, long VXX seems like an even better trade and unfortunately it has not options traded on it as of yet. Another vital lesson, and a completely rookie mistake on my part, was to look at the spread between spot and futures, VXX was trading at a large premium which would impede upward movement in the stock.

~ by largecaptrader on July 1, 2009.

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