<p>
But that’s what always happens. Something that we didn’t expect comes along. Sometimes we win, sometimes we lose. </p>
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</p>
<p>That’s one thing I do like about TD Ameritrade - on the main page of the web site, when you look at “Balances and Positions” – there’s a tab that you can click that says “options exposure” and that shows the deltas of all of the positions, stocks, options, whatever… So it gives a really nice picture of where you really stand. </p>
<p>I am not a high frequency trader anymore and I would not use TDAmeritrade. It is ridiculous that orders can be timed out except maybe at the close. At the close trades can clog up. Schwab says you may not be filled on an option order if you place the order the last 3 minutes.</p>
<p>Schwab, Fidelity, well they don’t have these timed out issues. Sounds like you are very happy with Scottrade. There is no reason to use a firm that can’t fill an order in seconds or a lot less actually. Some of these firms are selling some of their orders to hft firms. :)</p>
<p>I do use stops and I take my losses except for very long term stuff. I do not fool around when I have a loss. If a trade does not have a built in stop like a spread has or buying calls or puts have…stops are important.</p>
<p>Keeping losses small and letting profits rise is the winning strategy. I mentioned that 80 percent of market makers dont do well and one main reason was they let their losses run and took profits quickly. The idea that nobody went broke taking profits sounds good and is a lie. 
Taking profits quickly and letting losses run is one of the big mistakes traders make. It is hard to overcome this because for many people it is a normal trait. Maybe for most people it is a normal trait. </p>
<p>However, I look at at&t as a multi year hold so I handle this differently than something I just want to trade. I am committing myself to some shares of at&t for years unless there is a huge fundamental change…in which case I am slightly f…</p>
<p>I did sell some at&t. </p>
<p>I was long 10000 shares of at&t at 35.48 and now I am long 4100 shares with a cost basis below 35. I sold some 34.5 calls and some shares were taken away.</p>
<p>
I do read first. No “blink” for me. It’s just that the message doesn’t stick until I DO. </p>
<p>I mean, I understood in theory the downside risk of a vertical credit spread. I understood that there was money to be lost as well as to gain. I entered the SPY trade because I had just read an article all about how to look at the deltas and how you want to trade options where there is not much difference between bid & ask price. I considered a bull put spread but went for a bear call spread because I thought 200 was a level of resistance. The odds were probably 90% in my favor and I won that trade.</p>
<p>But didn’t anticipate how I would feel about it. </p>
<p>Now I know: I can make these kinds of trades, I can do it and even make money, but the up-front profit is real and I will feel all queasy and stressed up until the day those options expire, unless I close them out early, which by definition will cut into whatever profit I got from the trade. So no more credit spreads for me.</p>
<p>Not because they are bad or unusually risky. I just figured out that it is not a fun way for me </p>
<p>So yes, read first.</p>
<p>Then do, but only play with small dollars first.</p>
<p>Probably the best thing to do would be to open a very small account at one of these discount options brokers - something at the level where you are comfortable on day one with losing it all. Then diversify with a lot of trades with the goal being to juggle the wins and losses to keep close to the initial balance. If you start winning a lot and the balance goes way up, then you can increase the size of your trades, but also take some of your profits out and transfer the cash to a different account. In other words, say you open an account with $5000 and you are so good at trading that a year later you have $12,000. Take back the $5000 you originally put in. Now you can’t lose – you are only playing with the money you already won, and you’ve got $7000 in play. Going forward you can bank your winnings at whatever interval or level you want. But do bank them. </p>
<p>I don’t have enough time for all of that. Plus I like using my Roth IRA money for the spreads because that’s tax free. </p>
<p>But I do have a spreadsheet, so I can keep a running balance. </p>
<p>"But didn’t anticipate how I would feel about it.</p>
<p>Now I know: I can make these kinds of trades, I can do it and even make money, but the up-front profit is real and I will feel all queasy and stressed up until the day those options expire, unless I close them out early, which by definition will cut into whatever profit I got from the trade. So no more credit spreads for me.</p>
<p>Not because they are bad or unusually risky. I just figured out that it is not a fun way for me"</p>
<p>This is huge. </p>
<p>Feeling queasy, stressed, not having fun… That doesn’t work.</p>
<p>Blink is based on all my prior experiences. If my gut doesnt like something, that is my brain talking. My brain sees something it doesn’t like. Get the hell out. </p>
<p>My short term trade account is considered my Las Vegas account. It has a bit better odd than go to Las Vegas and bet on red for roulette. 
Note that I have not been to Lost Wages( as I call Las Vegas) for 10 years. My own pleasure gambling is now with the free poker game on iPhone where my eyes can see much better than sitting at a table in Las Vegas. Plus my husband does not gamble period. In the past, he went with the girls but now they are grown up, he is all alone.</p>
<p>“I dont do that often and I had no idea some guy in Europe would make a bid for t mobile and send at&t and verizon down 5 percent in days
But that’s what always happens. Something that we didn’t expect comes along. Sometimes we win, sometimes we lose.”</p>
<p>Always is a strong word. I wouldn’t say always. If this happened 4 days later, my puts would not have become stock. </p>
<p>My worst bizarre experience is when a guy who lived in a mental institution made a takeover bid for a stock I was short… And Dow Jones reported the takeover bid on its newswire. The stock ran up 10 points. I had to cover. I didnt know the guy had some problems. A few hours later Dow Jones said the takeover bid was bs. </p>
<p>Thanks Dow Jones for vetting. ;)</p>
<p>
Good, I like that. </p>
<p>My Scottrade rep told me that I will probably be able to write naked puts from the Scottrade account by the end of the year. He says I’m not the only one who has asked.</p>
<p>One thing I don’t like about Scottrade is that you can’t do combined transactions on the options – you can buy and sell, but you can’t do a buy-write or a spread or a roll. You have to set those up separately, and so that’s an extra $7 commission every time. </p>
<p>That’s not entirely bad. Sometimes you do better waiting a few days between closing and reopening a transaction because of changing market conditions. It was working in my favor when I was writing covered calls on HLF, which bounced around a lot, and also pays a dividend. I could always close out my calls ahead of the dividend, collect the dividend then wait until the stock was up again to write another call. Never had to worry about the stock being called away from me because it’s a bum stock, I wouldn’t have minded losing it, I was profiting off of of Bill Ackman’s mouth. I think I made more money that way then I would have if I was simply rolling the options out in an a single transaction.</p>
<p>But overall it’s a pricier and more difficult way to trade options. A single contract spread at Scottrade is $16.50 to set up while it is $11.50 at TDAmeritrade, even with a higher base commission. </p>
<p>I think if I was doing a lot of option trading I’d try Options House instead. They’re the ones with the 5 contracts for $5 deal.</p>
<p>@Dstark – my gut doesn’t have a clue as to how to make investment decisions. OK, sometimes my gut gets it right. One time I bought stock in Rocky Mountain Chocolate Company because my gut said, “mmmm, chocolate” and the stock went up. But my gut also said, “Best Buy? I like to shop at Best Buy!” and the market said – “well, apparently no one else does” and down it tumbled. </p>
<p>I acknowledge that other people make better gut level investing decisions than I do, and I do have to say that my gut leads me in the right direction in some areas. When I was practicing law, my gut sense that someone was lying to me or that something didn’t fit seemed to be pretty accurate. I think my gut has done a pretty good job over the years with parenting decisions. But it doesn’t work for buying stuff. </p>
<p>Guts need practice and experiences to work. Just like your guts with law.</p>
<p>My guts dont work in law. I just settled a legal case. I think my guts said settle. I have no idea. :)</p>
<p>I may have made one of the worst financial decisions in my life. I did not want to deal with the case anymore.</p>
<p>I still think my side is going to win and no one else that I personally know settled except for one guy. He was so stressed he was going blind. Really. </p>
<p>And his situation was worse than mine. My lawyer said he has never seen a case like this. He can’t believe I am even involved. </p>
<p>I did not want to spend my life with this case. As you know, cases can take years. This case is going to the court of appeals eventually. </p>
<p>Anyway, the case is unreal. The players involved are unreal. </p>
<p>I just wanted out of this mess. Bigger loss than I ever lost trading. </p>
<p>I settled but there would be little hickups along the way as we waited for the judge’s approval of the settlement. Every time there was a hickup, I had trouble sleeping. So even though, if I was an outsider and I had to bet, I would bet on my side winning, my gut was saying it doesn’t matter. Just get out. So I did.</p>
<p>I mentioned that the final trading scene in Trading Places was the best trading scene in a movie. (that I know). It depicted the fast pace of a trading floor when it was busy…which wasn’t always. </p>
<p>The traders I know that didn’t develop a good Blink…didn’t make it. I traded alongside one of my best friends who is very bright. He has a masters in physics. He didn’t make it. He always wanted to contemplate things but the trades are gone quickly. He also couldn’t close out losses. Some people think if you have losses your iq is lower. :)</p>
<p>I think Blink is very important in life…even if life moves slower than a trading floor. </p>
<p>My gut reaction is pretty good. I shorted the market on Friday before the Black Monday in 1987. I also bought my 1 house in less than 15 minutes upon seeing it and my current house in less than 30 minutes. New houses but still, I know some people takes forever to buy a car let alone a house.
So I’m quick with making decision but I’m also quick of realizing when it’s not working out. I rather admit my mistake and go on to the next. I realized it’s hard as dstark mentioned in one of his posts, human nature tends to do the opposite of what we should do. Take the profit and keep the loss. I tend to take the profit and realize the loss. Maybe I should take the loss and let the profit runs.</p>
<p>DrGoogle, I am not the decider 
but, overall, your Blink sounds good. Once you know you tend to let your losses run and cut your profits short, If that t is what you do, you can fix that. Some people never get it. There are option trades that limit losses. You have the strategy list. :)</p>
<p>My daughter was over my place and an old friend was over. When my friend left, my daughter asked, “what is wrong with that guy?”</p>
<p>I said, “He never fails to make the wrong decision”. His blink was awful along with his other thought processes. Kind of like George on that Seinfeld episode where he says every decision he makes is wrong. So he does the opposite of what he would normally decide. :)</p>
<p>Hey that’s one way to do it. Whatever works is my motto. :D</p>
<p>I don’t need to be able to make good fast (blink) decisions about trading because I’m not a day trader and I’m noton the trading floor. Even when I am online during the day I tend to take things slowly and deliberately. I’m not trying to make money on the minute-by-minute fluctuations in price. </p>
<p>I make mistakes when I do things in a hurry. Here are two dumb mistakes I made last year, on different dates. I have two different accounts with Scottrade --one is the SEP IRA. Twice I was using the Scottrade Elite platform and wanted to buy stocks in my SEP IRA but the platform defaults to the taxable account, so I placed a buy order for the wrong account. Both times I realized my mistakes and immediately sold the shares and re-bought them in the account where I wanted them – so my net loss was due to needless commissions. I have different goals and trading strategies for the accounts, so in each case i was something I wanted to “fix” --but it’s a very clear example of a mistake made because I didn’t take time to simply double check before I clicked the submit key.</p>
<p>I do sometimes trade during the day and watch throughout the day, but I’m doing that to see if I sense a pattern – has the stock peaked or bottomed out for the day? It’s very common to see a big bump or drop early in the day, and then some sort of equilibrium setting in for the rest of the day. </p>
<p>That doesn’t mean I’m indecisive. I very often do research on what I want, then go in and buy what I need – whether it is stocks or anything else. I’m a pretty efficient shopper. But I’ve got my criteria pretty much in mind already. </p>
<p>I think if you contact Scottrade immediately, Scottrade will move the trades to the proper account.</p>
<p>I guess I could have done that … it didn’t occur to me because it was clearly my error. Anyway, it’s water under the bridge now. But its just an example of mistakes made because I didn’t take the extra few seconds to review my order before submission. </p>
<p>So, what were you thinking with those 2 cent puts? ;)</p>
<p>I wasn’t thinking much. :)</p>
<p>I did have a plan. I really dont trade using my tush. ;)</p>
<p>I was already trading t. I wanted to buy the stock below 35 and I had sold the 35 puts earlier and they went out worthless. </p>
<p>The stock ran up when a smaller communication company announced a spin off. Analysts or others said t could spin off assets and create shareholder value. Stock ran above 36. </p>
<p>So…I thought the stock would drift lower but not too low. i looked at the 35.5 puts and I thought I would sell those for .02. They would go out worthless and I would make $200 while I waited for the stock would to drop close to 35.5 and then I would sell the 35 level puts. </p>
<p>And I did do the equivalent of this. The stock broke slightly below 35.5 and The short puts became long stock and I sold the 35 calls…so I ended up long stock short the 35 calls…which is the same poistion as short the 35 puts.</p>
<p>The problem was the stock dropped below 34.5. It broke its 200 day moving average which bugged me and I really was more comfortable long 2,000 to 5,000 shares of t at 35.</p>
<p>So…I traded all this option crap and now I am long 4100 shares with a breakeven 35 or lower…I think. Close enough. :)</p>
<p>So…I got where I wanted to end up. Just took a little while and some paper losses. :)</p>
<p>My most worry is not careful when I enter my trade. One time I meant to purchase Sears short but either the coffee didn’t kick in I ended up purchased a call. Luckily I checked and closed out quickly. So it’s my fingers that I’m most worry about especially on the iPhone.</p>
<p>The last week or so has provided some interesting discussions. I never heard the word “blink” before. You can always teach an old dog new tricks! Most trades I put on, I can lose more than I make but that doesn’t mean they’re bad trades.It’s not just about how much you can win or lose but that in combination with the probability of winning and losing and how you exit the losing trade which can frequently be turned into a winning trade that matters. </p>
<p>Predictions anyone? </p>
<p>More upswing? or September doldrums about to kick in?</p>