Options Trade Plan 2017

7 Sep 2017

These are the rules I think will work best for this speculative/trading style account. This is an aggressive growth stance and I use this account to place trades I think are too risky for my other retirement based accounts. I have raised the % limits per trade and removed the restriction of a full pre-trade checklist that I require in my other accounts. I will still be trying to sell premium in high implied volatility environments and will try not to be put stock. Managing winners for straddles and strangles at 25% and most other trades at 50% is pretty standard and will continue to be my set goal. I may do more directional trades such as diagonals and will manage the 1st (when trading multiples) at the 50% mark and then trail a G.T.C....... if I am looking to try to get more with a stop at BE. It is doubtful I will be doing a lot undefined strategies but the goal is to grow this account enough to fund a Roth every year with the gains. The goals are extremely high but I realize that in order to return this level would mean the risk could blow this account up......so while I am hopeful and think anything is possible....it is not an "all or nothing" deal.

13 Sep 2017

Catatan

TRADE PLAN 401/Roth

THE WHY?
In order to achieve financial freedom and the quest to manage my own money.

MARKETS I WILL TRADE
Stocks, Options, ETF's
Bonds, Metals, **Currencies**

**as positions are added it may not be possible to scale metals and currencies due to account size. Also I need more experience/training with currencies with the possibility this may be diversified to a different 4X account (Oanda)**

13 Sep 2017

Catatan

MAIN ACCOUNT

Ideally I would like to break my retirement plan into 3rds.........

CORE POSITIONS - 40%

1. Long stocks
2. Metals
3. Currencies
4. Bonds
5. Commodities

DIVIDEND CALENDAR - 40%

The dividend calendar is the idea of selecting high yielding stocks (maybe some REITs) based on the week they will pay their dividends, so as to receive a payout every week for the entire year. This will then be rolled into an IRA at retirement and will be able to produce income and reduce the need to sell stocks in a bear market. 500 shares of 16 companies that were approx. $25 dollars with a 3% yield would net $120 a week at the cost of 200K per tranche. MLPs would be avoided due to tax headaches and possible limited future of oil products.

OPTIONS - 20%

Any and all things are possible. Would provide way of getting short exposure in retirement style accounts.

13 Sep 2017

Catatan

TRADE ENTRY

Minimum 50% IVR for stocks and 35% for ETF's for short premium strategies
Maximum 15% IVR for long strategies
Full checklist (Shadow Traders) work up MUST be done BEFORE trade is entered
No more than 5% of cash available (not total account balance) can be risked on any one position. The fit into which sub category the UL will belong in will be determined before and also its delta +/- for overall portfolio balance.
Starting with 90/10 long/short portfolio until a better value is found.
For scaling around core positions or divi calendar stocks - separate rule guidelines will be made.

13 Sep 2017

Catatan

TRADE EXIT

For non-core or non-divi calendar positions will be managed as such......

Iron Condors, Verticals, Diagonals, or Ratio flys Win = 50% Lose = 2X
Straddles, Strangles, Calendars (not loss) Win = 25% Lose = 2X
Risk Reversals, Synthetic Long/Short
Single Leg Options Call/Put Assignment Total Loss

ALL Verticals/IF/IC Must collect 1/3 rd of the width of the spread in order to ensure 2X stop loss metric. If multiple positions are used, scaling out on winners is permitted.

13 Sep 2017

Catatan

SCALING

The primary purpose is to harvest yield (Divi Calendar) while taking profits at 17% target with covered calls and/or puts. Core Positions will also use options but with the primary purpose being Cost Basis Reduction, using less aggressive delta covered calls and will be rolled up and/or out to avoid being called away.


REVIEW

Every 120 days (4 months) I will take a minimum 10 day break from trading in order to both decompress and review all trades. I will be looking for which strategies are working best and what can be improved on. Monthly reviews for Reg-T will determine P/L for 5%/7%/30% rules. Would be better to use spreadsheet for tracking. Find a way to improve my trading......but if not broken---do not fix.

13 Sep 2017

Catatan

DRAWDOWN RULES

Reg-T 7% loss (realized) will trigger a one month suspension from trading. Step back and reassess your market awareness and what you may be doing wrong.

30% loss (realized) will end all trading for the year

** MONEY WILL NOT BE ADDED TO A LOSING ACCOUNT **

Hard to figure drawdown rules for 401/Roth.....any suggestions welcome? Have speculative account for risky trades but not sure what else to do.

13 Sep 2017

Catatan

ROTH

Looking to make the Roth an all ETF products account with a silver component. Not up to size as of yet, but is HIGHEST PRIORITY at this moment. For now will use for delta neutral plays and defined risk trades ONLY. No earnings trades. Account will be delta positive and hold as little as 20-30% cash reserves