GLD is rallying again today, and that means I have to roll up those puts. Similarly to the new SPY iron condor, GLD's cost basis is now 0.78, mark at 1.39. Maximum risk was reduced by $90.
We need GLD to decline down to 120ish by March 14-15. If it's not there, we will roll this position out to a later expiration to avoid assignment and to take in a larger credit.
Same goes for SPY. We want SPY to be around 196ish by March 21-22. If it's not there, we will roll this position out to a later expiration and take in a larger credit.
What's important to remember about high-probability trading is that high-probability of profit does not mean 100%. The days after we put both of these positions on there were massive rallies in both GLD and SPY. In this business, we can't be afraid to have losers. What separates a profitable trader from not is the ability to reduce large losses into smaller losses. That's what we aim to do at this point.
Also, remember the importance of capital contributions. Yeah, the account is down a bit right now. It won't look pretty on the performance metrics and all that, but what's more important is keeping your risk pool stable and/or growing. I put a fixed amount of money in to my trading account every Friday.
I believe 2016, as it already has been, will continue to be a tough year for all investors and traders. Hopefully I can at least stay alive out there, but I'm sticking to my guns. No need for hunting for a new method.
It's also tough to go out and add more risk when you're already down quite a bit in the account, but you have to. I will probably look to add a position or two next week, not today.
I'll be back around the close to publish the weekly position update.
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