Day 104

No crash, but a significant drop through continuous slow descent.

Market Recap

Both SPY and QQQ went down, quite a lot.

SPY is at ~$637, and QQQ is on ~$564.

VIX is high, and currently at ~31.

Trading Update

I was generally doing quite well considering the overall market, but I fat-fingered one 0-DTE setup and lost all of the courage I had built to keep trading 0-DTEs 😄.

If you have followed my other posts, you would know that I was lucky so far with SPX trades, and this is what I wrote in my previous trade log here.

On SPX, I have now made +$840 year to date, risking between $1000 to $2000 on any individual trade.

However they were mostly either Iron Condors or Bull Spreads, with a mix of 0-DTEs and ~45 DTEs.

This time I thought I will try buying instead of selling. On March 25th, my hypothesis was that SPX will gain a few points. With that I went and placed an order to buy an At the Money call, thinking I will exit super-quick the moment SPX inched just enough to give me a $50-$100 in profit.

Except instead of buying the Call, I accidentally bought the Put. The second I realized it, I closed the trade but the market was going up in those seconds so I ate a loss as the Put was losing its value every second. And then I immediately opened the correct speculated trade, i.e, bought a call. Except the market then started moving the other way - so I cut my losses, stopped playing, and began sulking!

These were the 4 trades.

I lost $380 due to my fat-fingered trade.

Then I lost another $880 since the market moved against my original theory.

Net loss: $1260 in 15 minutes.

The worse part is if I would not have fat-fingered my intent the first time, I would have been out with a profit since the up move right after the buy I placed would have hit my 10-25 % profit range for 0-DTE already.

Anyway, when you play with fire (like 0-DTE), you sometimes get burnt.

But that pretty much also wiped out my profits for the year, yikes! And yes, I was indeed profitable for the whole year up until this point even though the markets have pretty much been tanking left and right.

I am now down $717 in realized P/L, here is the laundry list so far (Year to Date).

Last year in march, if you would have told me that this year by March, my most profitable setups would have used Silver, I would not have believed you, yet here I am. I am learning quite a few things - but being profitable is something still quite elusive.

Trade Ideas I am Thinking of For Next Week

I am using ~35% of my Buying Power right now, with all my current trades already rolled/adjusted for the next 45 day cycle. I might open one or two call spreads to maybe get closer to 50% buying power utilization if VIX stays above 30.

And I have one protective Put on SPY ~30% out of the money, the philosophy behind that is something I wrote in extensive detail in my previous writeup here: https://www.foolishtrader.com/the-arithmetic-of-survival-one-path-and-the-geometry-of-wealth/.

Portfolio Status

Here is the current portfolio status, including unrealized P/L.

You would think I am facing some massive loss with portfolio ~6K down YTD, but I don't think I am too worried about that. I am trying to shake off some bad habits - such as taking assignment of supposedly good stocks - I have 200 shares of SOFI (Cost Basis at ~$26) and 100 shares of HOOD in here (Cost Basis ~$90) - and they represent ~5K of unrealized losses. I will begin trying some things with them after June unless markets start to rise again, trying to sell Calls against them right now is pointless.

And I am likely going to avoid taking assignments going forward - and instead just cut losses and move on at 21-DTE. These TastyTrade and Robinhood accounts should never ever see any Buy-and-Hold style trades - I already have Vanguard and Fidelity for those.

So with that, here is my first quarter learnings for the year:

• SPX/IWM 45-DTE Iron Condor trades generally have worked well
• Do not Buy-and-Hold Stocks (index maybe fine)
• Do not fat finger trades!

Thanks for reading. See you next week!

📌 Disclaimer: Nothing on this site is financial advice - I’m just here to entertain! Here’s my introduction, my trading philosophy, and some ground rules.