Tuesday, February 14, 2006

A Good Fight

Today is a day of much pain.

With housing, oil, metal mining and semiconductor sectors hitting lows and making us bleed at the money gamma in a bright flood of red I stare at the screens, utter a few expletives, clench and unclench my fists and make a decision to blow out our positions and wait for a better day.

Except that it's not really me making the decision. It's just my human self.

A sip of coffee. It's a crisp, shiny winter day and I haven't seen so much snow in a long while. I love snow. Another sip. It's Valentine's day and there is something special I am going to do for her today. And it's not just cooking dinner... Sip.

I turn back to the screens. It's expiration week, opportunities abound and there is money to be made.

My human self goes out for a walk, the trading machine is back and it's business as usual. We keep the portfolio and get bigger.

We like Housing and we're selling ATM credit spreads right into expiration. We like Oil and we're doing the same. We're watching Metal Miners (CLF and PD) to trade lower so we can buy stock. And we're looking to regain our long gamma in OIH.

This is scary stuff but this is how it has to be done. Because humans lose and only traders win. Make no mistake about it.

Cheers,
/Dmitry

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