AMZN loss


I just closed out of a shitty position on AMZN and want to reflect on it so I don't repeat the mistake. Overall I lost about $20k, or 8% of my account (just like during the election)

Mistake #1: terrible entry point. I bought in at $996, which at the time was AMZN's peak. I think at its highest it has only reached $1015 since. In order for my position to work, AMZN would have had to keep hitting new highs for a month or two.

Mistake #2: way too much exposure. I basically went all-in on AMZN. Not methodical at all. As an added bonus, soon after I opened the position Goldman took a huge shit on the tech sector. The guy who sold me my calls must have been celebrating.

Mistake #3: greed. This is related to #2. I completely ignored/forgot about my personal goal of 3% gain per month, which I have been making consistently since I set the goal after my last big loss during election season. Aiming for a modest return works; greed doesn't.

As a footnote on #1 and #2, after the tech sink I was writing on reddit that I was really tempted to buy more when it was down at ~$950, because it was "on sale". This would have been a good entry point. I didn't do it because I was aware of how risky it would have been to expose myself to it even more, but this is the kind of entry point I need to look for. Having my account mostly in cash makes me anxious because of FOMO, but it's a total fallacy. My account loses money much slower when it's in cash than when I open a half-assed position.

XIV: Side note, I don't fucking understand XIV. It's like helium. I'm going to stick to trading that since that was working well and was not exposed to bad news cratering it the way AMZN got rammed by Goldman this month. VIX is way too low to buy right now I think, going to wait for another dip...

Hedging Against Watergate


Trump really is as dumb as they warned us. Last week when he fired Comey I thought to myself, "this won't end well" and after the market kept stable for a day or two I bought 5 SPX May 26 2380 puts (SPXW 170524 P 2380). Cost basis is $6,358.42.

It wasn't particularly calculated - I just had roughly that much cash sitting idle so I moved it into a puts position that had a couple weeks to breathe. Just bought the fuckers with a market order.

For the next several days the market edged up and my puts deteriorated, to the point where I was down about 75%. Yesterday I thought about selling them and cutting my losses but decided to stick to my guns and let the position run its course. Well, today I was vindicated in doing so as the market fell over 1.5%.

Part of the reason I'm writing this post is to highlight how effective options can be for hedging. My portfolio is very simple right now:

Ticker              Qty       Cost basis
AMZN                100       $93,799.45
FB                  600       $89,866.95
GOOG                100       $92,605.98
SPXW 170524 P 2380  5         $6,358.42
Today, with the bloodbath from the Comey memo, the end-of-day change was:
Ticker             Abs           Percent
AMZN               -$2,131.00    -2.21%
FB                 -$2,958.00    -3.29%
GOOG               -$2,338.00    -2.48%
SPXW170524P2380    +$11,450.00   +618.92%
                   +$4,023.00    +1.42%
So a $6000 position protected my entire portfolio from a 2.5% drop - I actually made 1.4%. Of course the puts trade was purely based on gut instinct that the market has been on thin ice and I just as easily could have been wrong, but I feel good about the fact that I stuck with my original trade plan and it's working out how I expected. You can't control whether you're right but you can control how consistent you are. And no I haven't sold yet.

Blog system


I spent a few hours writing some scrappy go code to run a blog on this website. I've also moved previously published shit into it.

What's been up?

Not a whole lot. Tried to buy a house in upstate NY but got shafted by the seller's agent. Started a rewrite of Mondrian but that won't see the light of day for a while. Working hard at Kraken. Enjoying the East Village.

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