Week Two Summary – IRA Goal – 12/9/18 – 12/15/18

Out of the four goals for this 31 week challenge, I think this one is going to be the most dynamic.  At the end of last week I was set on finishing track 3 at optionalpha.com.  That didn’t happen.  It didn’t happen because I was letting the knowledge need of each day direct what I would learn.  I think this served me well this week.

I became and “Elite” member at optionalpha.com this week.  With that comes real time access to all of Kurt’s trades.  Through the course of the week I opened 8 trades in the IRA as Kurt sent out the alerts. 

The insights that have been most useful for me so far are in regard to portfolio management.  I used to place trades that looked good, but I had no idea how to “see” the portfolio as a whole.  At Tasty Trade you hear a lot about being “Delta Neutral”, which I understood, but beta weighting against an index takes it several levels deeper.  I could have 50 trades open in the Qs that were essentially delta neutral, meaning I benefit if the Qs go up or down, but I have no idea where I’m at if it goes down or up 10 points vs. 200 points.  

As an example, this is my portfolio after the initial 8 trades with optionalpha.com beta weighted against the SPX: 


From that analysis, I know exactly where I’m at right now.  If the SPX drops to 2459, I know I’ve got some issues.  If it goes above 2742, same deal.  And I know my job week to week is to keep that marker in the middle of my bell curve.  

Objectives for the week:

1.) Understand the entry criteria for an iron butterfly.

2.) Finish education track #3

3.) Build something in XL for basic position tracking.

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