Hey Guys,
Another busy morning here. I picked up new positions in all three accounts.
In my main account, most of my trades come right off the watch list. But today, none of my buy limit orders from the watch list filled right away, and instead two other trades set up (ALVR and SWKS). Both had just released earnings and the price had come way down as a result. By the time I got to them, both actually qualified as double down trades. It's atypical that my live trades don't come from the watch list, but it does happen occasionally like it did today.
I had a number of positions close today as well. I got tripped up by TRP in the main account as it hit the stoploss. But in the low-priced account, VST hit its profit target this morning. There were also a few positions that reached their time limits, so I closed those out for a net profit.
Yesterday near the end of the trading day I closed out a whopping nine options positions since they reached their time limits. In the beginning of the day a lot of those options positions were doing well, but around mid-morning a lot of them came down in value quite a bit. One of the challenges with trading options that are close to expiration is that their valuations can change dramatically with relatively "normal" movements in the underlying stock price. That can make for some noticeable swings in account value in short periods of time. Sometimes those swings are going to go our way and sometimes they're not.
The thing I try to work on is not getting too attached to unrealized results. In other words, if the trade isn't over, then anything can still happen (for better or worse). To my mind, this is one of the most challenging aspects of my options trading strategy: tolerating these abrupt fluctuations in account value. It can be a real roller coaster if you allow yourself to get emotionally invested in it. If we can detach ourselves from those fluctuations, we might improve our odds of sticking to the plan for the long haul (and enjoying a more peaceful trading experience!).
If you have any questions or feedback, I'd love to hear from you.