Day 121
I closed 59 positions this week and kept $952 after fees. Eighteen of them were naked puts, strangles and the rolls that go with them. Those eighteen made $801. The other 41 trades, 20 of them Zero DTE, made $151.
Thursday was a microcosm. A $417 winner and a $305 winner in the morning, then $743 handed back on one Iron Condor and $427 on one Call Debit Spread in the afternoon. Up $102 by the close.
Portfolio Status
Here is the portfolio status, including unrealized Profit/Loss. My current net liquidity is ~$58.8K.
My overall realized gains for the year went past $13K for the first time, at $13,187 gross, moving up by ~$1.7K since the last write-up. Fifty symbols is too many to screenshot, so here is the whole year sortable instead, collapsed to the twelve that move the number most. Sort it by "this week" to see what changed since the last write-up.
Year-to-date P/L by symbol. Open this post on the web to sort and expand the full list.
Details: $13,187 realized, minus $3,591 of unrealized losses on positions I still hold, minus $1,732 of commissions and fees for the year, leaves $7,864. On the roughly $49K I have put into this account that is 16.0%.
One of the main reasons the foolish trader endeavor exists is so I can learn to manage risk, but I have some capital preservation goals. First, do not lose money. Second, beat the risk-free rate, 3.35% today. Third, beat SPY, up about 14.0% year to date. Anything past that is icing. Eight months in, I am clearing all three, and I am doing it at roughly 5 net deltas while SPY's 14% came with the whole account riding the index.
The return is not the only output either. Buying the index teaches me nothing about position sizing. This week taught me plenty: $55 of credit against $445 of risk on Monday's overnight structure, $63 of premium against $137 into LULU earnings on Thursday, against four Monday morning condors that collected $215 to $260 apiece and were closed inside two hours. Knowing which of those is worth doing, and how much to put behind it, is the skill I am here for, and it only shows up when the money is real.
The Week at a Glance
What I Got Wrong
Three trades lost $1,632 between them. Everything else I did this week made $2,584.
The 7730/7740 Call Credit Spread, Thursday, minus $743. It was the call side of a Zero DTE condor I sold at 7:24 AM for $3.10 with SPX around 7,690. The index climbed all day. I bought it back at $10.35. That is more than double my entire Monday morning haul, given away on one position because if I am not immediately out after being wrong, the tactic is to let the Zero DTE expire instead of trying to manage it.
A Call Debit Spread at 11:38 AM Thursday, minus $427. With the index still going, I paid $6.90 to chase it. It closed at $2.71. I made this one right after the trade above.
Monday's 1 DTE structure, minus $462. A $5 wide Put Credit Spread at 7650/7645 sold for $1.06 with a Call Debit Spread stapled on, $55 of net credit against $445 of risk. I put it on 24 minutes after Monday's open and carried it overnight into Tuesday's settlement. SPX settled at 7,631, well below both put strikes, so it was a full max loss. I should not have taken $55 to risk $445. And once it was going against me on Tuesday morning, I should have closed it.
All three were directional bets, and all three were wrong.
What I Learned
I put three structures on LULU Thursday afternoon, hours before earnings. Same underlying, same directional view, same twenty minutes. The stock dropped hard on Friday.
The two Put Calendars, where I sold the Sep 4 strike and bought the Sep 11 at the same strike, lost $81 between them. The front-week short put went deep in the money and the back week never held its value.
The Diagonal, where I sold the Sep 4 110 Put against a Sep 18 115 Put, made $227.
I will likely keep it simpler next time onwards - I had a heavy bearish sentiment on LULU but hedged it quite a bit - should have trusted my instincts. Six of my last eight earnings calendars have lost money and I have written before that I have struggled to make them strategic. This is the first result that tells me to double down on instinct, keeping loss low but the chance of profit at least a 3x, so if I can get just over one-thirds of my guess right, I will be profitable on these trades. And if I don't have a feel for it, just sit earnings out entirely - I have had enough fun with it for now.
July versus August
I said last week I would compare the two months. August made $7,352. July made $9.31.
My average winner barely moved, $87 in July against $86 in August. Nothing about my winners improved. My average loser went from $287 to $100, and that clearly shows the importance of keeping losses small.
In break-even terms: with an $87 average win and a $287 average loss I needed to win 76.7% of the time to stay flat. I won 76.7%. July did what that math said it would do. In August the average loss fell, the break-even rate dropped to 53.9%, and I won 84.5%.
A couple of things changed. My median hold went from 8 days to 18 hours, and Zero DTE went from 2 trades to 29. July's damage was four positions entered in late June and early July that I carried to July 16: INTC at minus $691 and minus $316, MU at minus $386 and minus $234. In August my worst symbol for the entire month was SPY at minus $52.
One month proves nothing either. August had VIX pinned between 14 and 17 in a market that trended up, which is the ideal environment for what I shifted toward. What carries forward is that I got lucky on more trades where I cut losses at the right enough time. I have not quite mechanized when to quit a down trade, since high-probability trades do often come back.
The Trades
As usual, all times are Pacific. Risk is the possible maximum loss, which is spread width minus premium received.
Zero DTE
Twenty trades, fifteen winners, $476.
Monday was the template working exactly as it should. Four Iron Condors put on between 6:55 and 7:27, all four closed before 9 AM, $311 for a morning's work and nothing left open into the afternoon.
Thursday was not that, and the two trades that cost me are above. The one I have not mentioned is the 12:47 PM lottery ticket, $20 for the 7760 call, expired worthless. Which is exactly the trade I keep telling myself I have stopped making.
Three of this week's Zero DTEs were opened before the US market was even open, including one at 2:49 AM. Those three made $848 between them and they get their own section below.
Longer Dated Index
Five trades and a net of $39. The three winners made $511 and Monday's first trade lost $462 of it back.
The two structures that worked, the Tuesday bullish Sep 4 setup and Thursday's Sep 8 setup, were both put on with a directional view and closed the next morning. $500 between them, which is what the Monday trade gave away by itself.
Global Trading Session
SPX trades nearly around the clock, and I have started putting positions on before the US market opens. Three of them this week, all winners, $848. Here is every one I have done all year, since I only started on Aug 10.
Seven trades, six winners, $1,234 net, averaging $176 a trade. The 139 SPX trades I have opened during regular hours this year average $15 a trade and net $2,072 in total. So the pre-open trades are 5% of my SPX count and 37% of my SPX profit.
Seven trades proves nothing. One of these going the other way flips the average. What I can see so far is a hold-time pattern: all six winners were closed within about two hours, most of them before or right at the open, and the only loser is the one I carried six hours into the afternoon. Whatever I am catching pre-open seems to be a move that is finished by the time the US session gets going.
Pre-open SPX is also thinner than the regular session, so the spreads are wider and my fills are worse, not better. If there is something real here it is not coming from execution quality. I am going to keep doing these deliberately for a few more weeks and count them separately so I can tell.
Earnings Calendars and Diagonals
Ten trades, two winners, minus $179. Four of them are last week's positions finally settling.
The MRVL and CRM calendars I put on before last week's earnings expired worthless on Friday. MRVL cost $455 across two of them, CRM cost $113. Same shape both times: sell the earnings-week strike, buy the following week at the same strike, watch the underlying move far enough that the back month never holds its value.
DELL was the best trade of the week and the opposite outcome from the same structure. Sold the Sep 4 500 Call, bought the Sep 18 500 Call for a $7.04 debit, closed it Wednesday at $10.17. $310 on $704 of risk in three trading days.
LULU is above.
Defined Risk Equity Spreads
Six trades, three winners, minus $186. This is my least consistent bucket, and it has been all year.
I closed both TGT spreads on Monday for $53 combined. I said last week I thought TGT could not keep rising and that I would convert these to naked positions. I closed them and have not put anything back on yet.
The rest is me selling 2.5-wide call spreads for 60-something cents on names that were going up. AAPL and CRM both ran through the short strike. The LULU Iron Condor was worse: sold at 11:38 AM Thursday for $0.63 against $137 of risk, hours before earnings, and LULU went through the put side. Selling $63 of premium into a binary event with a defined loss I cannot roll out of is the exact trade my own rules say not to make.
Undefined Risk
Eighteen trades, seventeen winners, $801. The boring book won the week.
HOOD was the biggest single winner at $190, and it needs context because it is not a standalone put. It is the untested side of a strangle. HOOD has run up and gone through my call strike, so I have been rolling the put side up behind it, which is the mechanic: collect on the side that is working, bring it closer, reduce the net cost of being wrong on the other one. The 95 Put I closed here was already sitting close to the call strike. I am betting HOOD settles back down. And as I write this I realize I changed the nature of the risk from a Strangle to a naked call, and I don't like that, so I will go back and sell a Put when the market opens to get back into the Strangle. I would rather take a loss on a Strangle than on a naked Call, since the risk of a naked call bankrupting me is way too high.
SOFI keeps grinding. Six adjustments this week for $119 net against a position that is still $1,580 underwater and that I have been rolling all year. I said last week I wanted to exit SOFI. I sold two ATM calls, closed one of them at a small profit and kept one of them still open. I will get back on it again maybe next week.
Everything else behaved. MRVL gave me $166 across three short puts, CRWV $95 across two strangles that both came off inside a day, and SPCX, MRNA, AAPL, NFLX, UBER and SLV were routine expected move trades that closed fast.
Interactive P/L heatmap. Open this post on the web to see the day-by-day breakdown for August and September.
Market Recap
SPY is at ~$770, and QQQ is at ~$719. The S&P closed at 7,686 on Monday, 7,631 on Tuesday, 7,667 on Wednesday, 7,748 on Thursday and 7,719 on Friday. Four of the five sessions moved less than half a percent; Thursday moved 1.06% and accounted for the whole week.
VIX closed Thursday at 14.32 and has now spent 25 straight sessions between 14 and 17.
Current Positions
Most of my idle cash is in BIL. I sold the last of my SGOV on Wednesday.
I am almost neutral across the current positions. I am long 5 deltas, collecting $33 in theta per day out of a remaining $1,601 in extrinsic value.
I have short premium in AAPL, HOOD, SOFI, NFLX and META, defined risk but bullish structures in GLD and BE, and the PANW calendar.
Running Threads
SOFI. $1,580 underwater, rolled all year, $119 collected this week. Sold two ATM calls to start working out of it, closed one for a small profit, one still open.
Earnings calendars. Six of the last eight have lost money. The LULU diagonal is the first structural clue.
TGT. Spreads closed Aug 31. Said I would convert to naked. Have not.
HOOD. Call strike breached, and rolling the put up left me sitting on a naked call. Selling a put back on Monday to restore the Strangle.
Pre-open SPX. Seven trades, $1,234. Not a sample yet. Counting separately.
What's Next
I was on a break and return to work next week, so my trading is likely going to slow down, except if I can find some bursts during the week.
I will continue to trade Zero DTEs.
I am looking forward to my BE spread - I sold in the expectation that BE gets included in the S&P, and it did get included. Let's see how much it rises when trading begins.
I also think market might slow down and traders might move into Gold, so I am bullish on Gold too. This might be a longer duration trade though.
Lastly, I would love to go long with a bigger risk on SPCX since it has worked well in small bursts for me so far. I may not trade that in this account though - perhaps an IRA in case SPCX runs up after a hypothetical Anthropic IPO in the coming few months.
Thanks for reading.
📌 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.
