Good morning hivers, I finally got to trade today. It seems like its been a long time, but in reality its only been a few days..
As I mentioned before, I am subject to a silly rule know as PDT, or pattern day trader. It says that, any trader with LESS that $25,0000 in his of her accounts must only trade 3 or less daytrades within a 5 day period. (holidays don't count) A daytrade is when a trader buys or sells a position on a stock, then closes that position with an opposite order, all within the same day. So, I have decided to limit my trading to the last 3 days of the trading week (wed, thurs, fri) since those tend to be more predictable and usually trend strongly.. the exact 'pattern' I look for. (ps. how does having money (over $25k) make a trader suddenly and magically NOT a pattern day trader?)
So, Here is what I saw as soon as I opened up my platform today..
This looked mostly green, meaning up, but these colors also change in brightness according to the strength of the moves.. so i'm thinking KINDA bullish??
Here's the hourly showing a longer term view of market movement..
It looked to me like the market was just turning up, but still unsure..
Let's check the 15-minute..
The 15-minute seemed a bit clearer, price looked like it had his its bottom and was now in a slow up trend.
The 5-minute chart agreed and things seems to be moving up and down, and up some more..
I went ahead and entered a PCS, which is what I prefer to trade on most days since the market does move up most of the time.
As you can see here, I decided to sell 2 contracts this time since I had enough buy power. This would double the profit OR the loss of this trade, but I knew that I would most likely be closing this one before the 1 hr mark, so I wanted to make it worth it.
The credit I received (0.75), which is really $75 per contract since options are bought or sold 100 stocks at a time, was more that I usually get for this delta, which told me that is was a little crazier and riskier than usual.. this also meant I need to watch this one closely and close things fast if needed.
My thinking was, I would let the trade work and price should continue to rise slowly, or at the very least, range up and down a little.. until the hour is up and I would close it at the p/l it was at.
Here what it looked like on the option chain right after I entered..
I sold the 3980 stirke price, which was at delta 16 at that time.
Fast forward about 30 minutes and the option chain looked exactly the same. Price had indeed risen a little, but also it would fall right back down so that now price was back to where it was when I had entered.
In options, there is what is known as decay. So, when the day starts, decay is at 100 and slowly decreases to ending at 0 at the end of the day.
This means that although the delta was the same as when I started, I had gained 30 minutes of time decay. or in money terms, my open p/l was now at +$20. :) As long as price didn't take a nose dive, I would end up with some kind of profit at the end of my trade
Shortly after this, volatility spiked and price started acting wild. One second price was moving steadily up, but the next few seconds it would move down FAST. I was able to survive the first big drop, but wanted out of the trade SOON. I didn't panic.. I knew price moves up and down, then up again.. so I just adjusted my limit order which would close the trade for me if/when price triggered it. I had to change my limit order once more, but did mage to exit my trade about 1 minute later.
It turned out be a good trade and also a test of my executing skill under pressure. I did know that I had a final stop that would get me out had things dropped much faster, so I wasn't too worried. 馃槉馃槑馃
