#1 Huge Challenges Ahead

by admin on August 1, 2012

Recent weeks were not so smooth sailing for me as I had several losing trades after my previous Sugar win #1.1 Second Sale For Sugar. This has definitely taken a  hit on my confidence level.
Nevertheless I thought of updating my progress for both my weekly options and futures options venture thus far.

Weekly options: -$337.46 (I could not show the exact details of the trades as they were given by a mentor from a course. #1 Weekly options on stocks)

Futures options: -$4174.67 (Trades taken as shown below)

If all the columns seems very confusing , just look at the last column will do, it shows the end results of each individual trade. (The rest of the information are for those who are interested in the details of the trade).
As you can see there were only 4 different trades done so far, namely soybean (ZSX), sugar (SBV) and corn (ZCN).
All losses came from grains and the two biggest were from soybean.

Soybean

One of the biggest reason for the huge losses for soybean was due to US having one of the worst drought since 1950s (http://blogs.voanews.com/breaking-news/2012/07/18/us-worst-drought-in-56-years/).

I would not entirely blame the drought or my bad luck for causing the two biggest losses so far. It was a combination of no planning and emotion.
I sold two soybeans call at 1800 and 2000 strike respectively.
Greed took over me when I saw 2000 strike having a good premium of $500 (10 points as per the table). –> Lesson learn: Not too overly invest in one commodity class unless you know what you are doing.
Basically when I sold the 2000 strike, I had no plan, I just wanted to gain more. I had totally forgotten what was my initial trading plan or I should say I had no plan at all. I am just going with the flow.

Get Back On My Feet

I was quite shaken after the two losses and as advised by Dave from Smartpassivecashflow, I should take a two weeks break from all trading in option selling.
I took his advice and currently I am still barring myself from looking at any chart or prices of any commodity, I am focusing more on my apps business #2 iPhone Apps Business.

So am I going to stop trading OR consider myself ‘burnt’ and not to touch option selling forever?
No. I am going to re-enter this option selling investment again taking smaller steps this time round and planning way ahead before any action :D.

Cheers,
Charles

Disclaimer: The author is not a licensed financial advisor and the information is provided for educational and information purposes only.
Trading commodity futures and options have large potential rewards but also contains a high level of risk and is not suitable for all investors.
Only risk capital should be used when trading futures or options.
None of the information provided constitutes a solicitation of or a recommendation to buy or sell any futures or options contracts.
Please seek the advice of a professional financial advisor before investing your money in any financial instrument.

 

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