Re: [TheOptionClub.com] Why Did I Lose $$$?

 

I already sent this reply once, but for some reason it did not get posted. So, once more, with feeling...

I input your trade into my Optionetics Platinum acount (NO, I am NOT an employee of Optionetics, just a 10+ year customer) and generated a risk graph. Note that the prices in the risk graph picture are closing prices. I uploaded a picture of the risk graph in the File section entitled:

MCD Dbl Calendar - 2-18-10.png

So, it looks to me like you may have chosen the absolute wrong time of day to exit the trade.

I hope this helped.

Ben

--- In OptionClub@yahoogroups.com, Chuck Grimsley <95omega@...> wrote:
>
> What happened with volatility over the course of the trade? Aren't
> calendars long vega? -cg
>
> On Mon, Mar 1, 2010 at 5:31 AM, Meuter Gisbert <gismeu@...> wrote:
>
> >
> >
> > Hi Robert,
> >
> > you say,
> >
> >
> > <<I am obsessed with calendars and need some tips.>>
> >
> > I don't think that obsession will make you money. You need to be neutral,
> > colourless and unbiased.
> > Also, if you don't want to papertrade, at least don't put on so big
> > positions. Two calendars would have been enough.
> >
> > best, gis
> > P.S. If you absolutely don't want to papertrade, ask yourself why? The
> > answer might be quite revealing
> >
> >
> >
> >
> > On Sun, Feb 28, 2010 at 11:49 PM, RobertH <robhansen5252@...>wrote:
> >
> >> I've been trying sooo hard to learn calendars, and have gravitated to Dan
> >> Sheridan's method of calendar adjustment. I opened a position in McDonalds
> >> on the last day of December with the stock at $62.44, buying 12 of the Mar
> >> 62.5c and selling the Feb 62.5c for a debit of 0.26. When the stock hit my
> >> upper break even point on Feb 3rd, I peeled off half of the 62.5 positions
> >> for a credit of 0.21, and initiated a new 6 call contract position at the 65
> >> strike which cost me 0.49. So now I have a double calendar, all calls, at
> >> 62.5 and 65. The profit loss graph looks like a boy scout tent with very
> >> little sagging in the middle. Well, I couldn't get out of the trade with a
> >> profit all the way to the day before February expiration even though the
> >> stock was safely between my strikes. Also, my profit loss graph (at
> >> expiration) still looked good. I exited the trade on February 18, closing
> >> the 62.5 spread at 0.31 and the 65 spread at 0.54.
> >> On paper, I was ahead $30.00 after all that trading, but factor in
> >> commissions and I lost $78.84. What am I overlooking here? This should
> >> have been a slam dunk. From what I see, I should have let the short Feb 65
> >> call expire worthless while the March 65 call shot up from 0.60 to close the
> >> week at 0.72. (Didn't know that in advance, though). But I didn't think
> >> anyone holds calendars all the way to expiration.
> >> Anyone with calendar experience care to take a look at this one. I am
> >> obsessed with calendars and need some tips.
> >>
> >> Thanks,
> >> RFH
> >>
> >>
> >>
> >>
> >> ------------------------------------
> >>
> >> The goal of TheOptionClub is to provide a forum for members to work
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> >
> >
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