Trading Journal Entry For 1/31/2014

We did not actually make any trades today but we had one long-term trade expire today and we made two high/low trades yesterday, Thursday the 30th. They were a decent group of trades overall and we definitely came out ahead. However, we did have a “duh!” moment which cost us $85. Oops! It was a volatile week for the markets (which we love) but unfortunately we didn’t get a chance to trade much this week so we are looking forward to next week. Hopefully the volatility keeps coming for us.

The Bosses Trade Journal For 1/24 to 1/31

Lets go over our “long-term” trade first since we have been waiting on the outcome for awhile. We purchased this Call option on the S&P500 on Friday the 24th, with a week long expiry and $119 invested. This binary option contract was offering a return of 75%, or $208.25 on our $119 investment.

image of the bosses investments history at traderush

As you might be aware the market experienced some sharp drops early on in the week so we have been feeling pretty confident about this trade the whole time, just waiting for that expiry to roll around. And indeed, as you can see in the image above it all worked out in the end and our account was credited with the $208.25 which we were due. Nice!

Next up, not so nice. This was our painful and costly duh moment, unfortunately. We should have won on both those “FAZ-Short Banks” contracts but for a stupid mistake. Luckily it was on the smaller investment at least but still painful. Our analysis was for broad market declines, so that’s a put option right? Wrong in this case, doh! It is a SHORT contract, an inverse trade. It gains value as banks lose value. Therefore a Call option is a bet on bank price declines, not the other way around. Of course we knew all this when making the trade, but unfortunately had one of those brain-freeze moments and clicked through too quick.

screenshot from our faz-short banks trade at traderush

Just as we predicted markets generally, and banks in particular continued to decline throughout the day. Unfortunately this meant that our mistakenly made trade was a big fat loser. We did, however, attempt to make up for our mistake a bit by entering the trade again, but correctly this time and for a larger investment. And luckily the market continued to cooperate with us, banks got hammered, and our trade finished well in-the-money (ITM). So while we lost $85 on our foolish mistake trade, we gained $72 on the next one to almost mitigate our losses. Not bad considering how bad it could have been. Still, it just hurts to make such a stupid mistake.

Our long-term trade saved the day to make for an overall profit/loss on the trades of $76.25, not too shabby. Not great when you consider that those were the only trades we made this week. But we’ll take a small profit over any kind of loss all day. For the month we are only up a bit over $250. Which again isn’t great, but also isn’t terrible considering the small $ volume we traded this month. We hope to start strong next week and get in a lot more trade volume next month than we did this month. However, that will depend on how well things go. We follow our own advice of stepping back when trades are going against you, and stepping it up when they are going your way. Good luck with your own trading!