following the stock market activities of Tom Denham

Taking a break

I am taking a break from updating Daily Option Strategies.

I sold too many puts about four months ago. I began to appreciate the risk several months ago, but assumed that all I had to do was wait for the next options expiration day to be okay. I was wrong. The market fell too fast. I executed the nuclear option on Monday to preserve capital and ran the Close All Positions function with Interactive Brokers, locking in a big loss. I managed to keep the bulk of my capital, but will be spending the next few weeks completing the paperwork on all the transactions.

Current high volatility and an uncommitted pile of cash convinced me to start trading again on Tuesday. I thought I might take a break for a while, but will save the break for the next time the market is grossly overbought. The iron is hot, so I am striking now, just not posting all the details.

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2 Responses to “Taking a break”

  1. It’s rare to see such honesty from an author in a blog. Also, I think you did the right thing to preserve your capital when the market was falling too sharply.

  2. Tom Denham says:

    Thanks. I knew better than to let myself become so exposed, but knowing better and executing better are sometimes two different things.

    I still have about 700 transactions to process, but have already worked through 100s. Sadly, most of the positions were excellent and could have performed as planned if I had not been greedy and added as many positions as I did.

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