Originally Posted by mpr
Rando, since options is your tool of choice.. I have a question for you. Why do you choose options as a vehicle? Very often I notice that the best times to enter are volatile times or times of consolidation, both of which punishes the option trader who positions in the chop. Why not futures as a vehicle or etf's? Something where time can't hurt solid entries?
I actually switched when things got completely nuts last summer, I didn't respond well with bigger equity positions in such volatile times. In retrospect, moving to futures might have been the right choice at that time, but I'm still not sure. I definitely like the known max loss potential with options. Granted proper stop management in futures eliminates those concerns, but I've always felt a bit uneasy with the structure of futures trading. Perhaps that is my own ignorance or misapplied learning. I admitted to Ichibomb many months ago I should get into futs one day. One hesitation I still have is those situations like today, I don't like to place the hard stops as stop loss orders, used to always get shaken out and I do better setting a range and going by instinct in the range - which leads to the occasional mental laps (Stubbornnes) but I'd rather bitch about me than stop hunters, it saves on tin foil (hat material). Also just trading day sessions is preferable for the family schedule, 4 yr old kid is in school during market hours, hand in glove.
In regards to the trade today, was long SPY 131 calls from 1.28, got the average down to 1.20 on that dip when the pivot acted like a champ, then saw AAPL 563.00 low, knew NQ had to weather the new low, and once it did, we caught our nice bounce. Adding to those calls was key, it was a 50-50 proposition, but my second buy moved about 35-37% in about 40 minutes, scaled out as SPY broke 132 in case it was a headfake, then the rest after that first spike topped out. Way
too much realized risk (a touch worse than 1:1), but given the pivot and other fairly key levels holding in the face of DX 82.50 and bonds testing 147"20", I'll take the avg 18% gain.