January 2019 Summary

I decided it is a good idea to start documenting my thoughts each month, what actions I did and why so that I can review them in the future and find out how my vision of reality played out in comparison with what actually happened.

As mentioned in the post here I am accumulating Bitcoin at this time at a rate of 0.15 BTC / month. Since there is not a lot going on at the Bitcoin markets at this time I decided to not take further action and trade on those levels, I will just continue to accumulate as I planned last December. I am also not willing to trade altcoins or Bitcoin on leverage since I find more fun to trade in the USA markets instead.

I started playing with USA options and I managed to not blow up my account yet. I started trading them on January and by end of January I am down 50% . For me this is a satisfying performance since I am learning how to trade them. I use online resources to educate myself and bought a couple of options books which I find very useful.

The biggest mistake that I made 2 times and that I am not going to repeat again is that I traded options on Twitter and on Netflix earnings. That is I bought puts and bet that the direction of the stock will go down for Netflix and I bought Calls and Puts for Twitter options.

Both options had very close expiry dates and there was not enough time for the stock to make a move that I would end up in profit.

All options were bought at the Money, however the Implied Volatility was really high when I bought them and that means that I overpaid for them.

Twitter actually went down but since I had Call and Put options with a ration of 5 / 3 the down movement was not enough to end me in net profit.

For those two trades I lost around $2000 so the lesson I learned is that I should never buy any options which expire shortly after an Earnings Release. Even if the stock moves at my direction I tend to close fast my winning positions and let my losing positions keep losing so this game is not for me.

For February I will be only trading Amazon options. My plan is to buy weekly puts and calls on the same strike price and review their performance and the end of each day. I have put a take profit limit and I will avoid looking at them during the day because my Emotions do not let me think clearly. I started with this tactic during January end and I made around $900.

I hope next month that the Bitcoin markets are more exciting so that I can trade a bit of Bitcoins as well.

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