Analysis of Options Trend Following and Donchian Breakout Trades – Video


Well, it’s the Tuesday before Thanksgiving and the markets are pretty quiet.  This is a video recap of the open positions at Theta Trend as we go into the holiday weekend.

If you just watch the video and don’t read anything else on this page, you should still probably check out the Donchian Trade story below.

QQQ Short Vertical:

The QQQ 80/75 put vertical in the December Quarterly options will be closed out before the holiday, but at this point it’s still open.  We’ve collected about 72% of the initial .75 credit on the vertical and it’s time to move on.  Weekend theta gets priced out of options in advance of weekends and there’s no reason to hold the position with the hope of collecting a couple more pennies.

IWM Short Put (naked):

The IWM short put is also sitting with an open profit.  The trade has been very hands off and worry free because IWM got a little pop up in price shortly after the trade was entered.

SPY Short Strangle (naked):

The short SPY strangle is still open and has an open profit.  I’m starting to get a little short delta and for the sake of this position I hope SPY doesn’t make a strong charge to the upside.

Top Performing ETF’s Monthly Rotation System:

FAN is the only position I have open for the Top Performing ETF’s monthly rotation system and November has really been a non-event.  Price is sitting near the entry price from November 1st, but the ETF does look weaker than the broad equity market and that makes me a little uncomfortable.  The updated ETF rankings will be coming out this weekend and we’ll see if FAN falls out of the top 2.

Donchian Channel Breakout Trade:

Short Yen baby!  I’ve been seeing an awesome girl for a little over a year now and when we first got together I was short Yen and that position was covered sometime this past spring.  This week I bought USD/JPY and got short the Yen again and also pyramided or added to the short position.  Last night I made a point to let my girlfriend know that I’ve been short the Yen for the majority of the time we’ve been together.  How awesome is that!

Here’s a video that goes through each position.  Enjoy: