Been a while since I posted. I haven’t needed any catharsis so that’s probably why 🙂 What a great/fantastic two month period we’ve had…I mean the market (RUT) didn’t move up 7% in a cycle! Can things get any better? The last two months have made the entire year, I might even achieve the 7 figure profit in a 12 month period IF the next two-three months behave. Major Major milestone. When I say behave, I mean it goes down, stays neutral or goes up 3-4% max. That’s all that’s needed. What a journey. I started trading by investing in AAPL and BRK.B, frustrated with the lack of hands-on, I got into earnings volatility options plays via www.steadyoptions.com and eventually on to Modified Iron Condors only to experience the most dreadful trading experiences in Oct 2014 and Aug 2015. Learning experiences! I finally stumbled onto the M3 and BB courses via John Locke and here I am trading BWBs in my own way profitably and into 2017.
As my portfolio and trading size gets larger, I’ve been putting on more and more Space Trip Trades in an effort to hedge my portfolio by way of cultivating the STTs to the point where only debit spreads remain on the first set while cultivating the other expirations to the same point. My main concern is an 9%+ gap down overnight. I want to be protected in any flash crash and a gap down of any size. It’ll take some time to cultivate the STTs to the point where they are providing protection for both the ATM trades and the uncultivated ones still in process (in the case of a 12%+ move). Once, I have adequate hedging I’ll start to increase my size past what it currently is. I’ll probably be sticking to SPX with versions similar to the White Rhino and Jim Riggios 100 point butterfly. I really like the approach Jim Riggio takes. Sell volatility when vol is high and buy volatility when vol is low. Simple. I’ve changed my style a bit and I don’t use calendars and I will probably be doing versions of reverse-harveys for the upside rather than using call BWBs. It’ll be sometimes selling or buying iron condors as adjustments to the butterfly structure (depending on skew and volatility). I might have to call my trade something else, probably will end up calling it PEAK.
My November trades are all 10%+ and I have already started closing them all out by removing risk and unwinding the structures.
I’ve got Dec expiry on and I’ll look to put on some January as we get closer to the election (option premium will be elevated and the BWBs cheaper to buy). I might hold Dec but if I am anywhere close to a 6% profit, I’ll probably close them ahead of the election. They’re doing very well right now so it’s possible.
Nice going T&T. It is interesting to know that you will be primarily using SPX and Kevlar style trades. ( I had similar conclusions but they are now more cemented based on what your conclusions are).
I am still trying to understand how Jim makes his adjustments as there are so many variables he considers based on his experience. Do you any high level plans/guidlines in terms of adjustments for Kevlar.
Cheers
T&T,
Thanks for the info you’re posting. I just found your site after searching for info about the STT. I started trading RUT M3s this year and just watched Ron Bertino’s presentation on the STT as a hedge. Very interesting concept!
I was wondering, have you found an optimal DTE to enter the STT and how long after to enter your bwb? I’m looking at doing some backtesting so I’m trying to determine some DTE parameters to start with.
Thanks for any info you can provide!
The big release of the STT trade materials is scheduled by end of year. I hear its 400 slides and several videos. I think it might be a game changing trade. Love the concept.
I do 3 month entry (90-100 DTE) and I just enter them whenever we have a higher vol day. I always have on several BWBs usually in 3 month spans (IE Dec, Jan Feb expiries as early as a week ago) so I don’t really relate it to my BWB entries.
I’ve enjoyed reading your blog. I just browsed through a few of your earliest entries. I noticed you were trading iron condors, momentum strategies, etc. at first, but now favor things like M3, Rhino and RTT. I’ve traded many markets and dabbled with simple option trades (buying calls/puts, credit spreads, etc.), but have just learned about these more advanced options strategies.
I haven’t bought any courses or subscribed to any alerts yet. How would you recommend learning about the BWB/M3 trades? I’d prefer to start with a strategy that’s more straight-forward and rules-based. Thanks.
I’d have suggested John Locke M3 course but its more concept based so given that, I think the Brian Larson/Bruno Voisin Rhino trade is the way to go. I trade it but with my own variants. I’d also suggest joining the Index Income Trading Skype group. Tons of great info and camaraderie there.
I specifically trade a Rhino Variant which is just a BWB but I now use Reverse Harveys etc to handle upside or I’ll buy calls periodically to hedge upside. Saved me a bit of pain during this last up move. That’s really outside the plan though and done when the culmination of any indicators I use sets off alarm bells in my head.
Thanks for your feedback. While there’s more talk about Road Trip and Kevlar, I’ve read that Rhino is the most straight-forward and mechanical of those strategies. That fits my trading style better. Do you know how the official Rhino trades have done this fall? Capital Discussions hasn’t updated them since August.
I’ll look into your Skype group as well.
Nice blog, lots of good reading. I’m curious if you are travelling and trading what do you do for an internet source? For example, if you are monitoring your trades all day with streaming quotes and using something like Optionvue with that streaming as well, do you have a problem with connection reliability or exceeding allowed data limits?
I always make sure that I’ll have connection available. I immediately buy data sims at whatever location I’m at and I schedule flights around market hours. In Europe, things are easier since the market opens at 3 or 4pm giving you a lot of time to prepare and see the sights. I use remote desktop to a PC machine (AWS) which has my optionvue etc on it. This way I can access it on my phone, iPad, etc any time.
Sometimes I’ve had some problems at Airbnb that had terrible internet connectivity, then I just stream from my prepaid sim. Data in EU is super cheap so it’s never been a problem.
I guess the blog should be called travels and Trades (in the EU only) eh? Since I have small kids, I haven’t ventured outside of Europe, Canada and the Caribbean while trading. The last 3 years I’ve spent 3 months a year in EU doing road trips or cruises which I have down to a science (yep, even cruises).
Stumbled onto your blog googling rhino trades to see if anyone’s been using them successfully and just wanted to say that I enjoy reading your posts and keep up the great work. I trade on a much smaller scale but can relate to your posts having had a similar trajectory with options (iron condors with its attendant stresses when indices make a break for it, spreads and then BWBs)
Thanks appreciate it. Been a while since I posted. I gotta update this more.