I just use my terminal but there’s lots of services out there for a few hundred bucks a month that offer it up. I doubt they break it down how I do but they’ll show you all the big trades and then you can look at whether it was put on the bid/ask etc and figure out what it was.
Final question. These days I tend to think of the size of a position (actually the size of a commitment for a given underlying) in terms of the aggregate maintenance requirement for all the positions in the underlying. When that amount goes beyond about 3% of my account value, I start to feel uncomfortable and think about trimming it. Do you have any rule of thumb in that regard? Is there a mental limit you tend to impose on your positions?
so here's my take on this and I know many will disagree but for me, if you're not willing to go to 50-100% of your book on a position in the short term, then you don't have the conviction on the name.
Think about that for a moment, I'm a big believer that diverisification is the enemy of great returns, I've always managed just a handful of positions and I don't believe in scattering out. You see me, I lever into names, strategically, far lower than they've been but I still am not scared of getting in names at certain levels. I guess the reason I'm not "uncomfortable" so to speak is because this is my trading account and in my head even if it goes to $0 I wouldn't be homeless and on the streets. With any trading account you have to be using money you aren't worried about losing. Would I be upset years of hard work is lost? Absolutely, and no I don't anticipate that ever happening, but this isn't my style. Even my long term holdings I've told you it's just a handful of names like Amazon,Google,Microsoft,EPD,etc.
So in regards to position sizing it's like I always say, we all have different goals, tolerance levels, etc and there isn't a one size fits all number. You can see from my sizing, I'm willing to put 75% of my book in Amazon at $70 if it closed the year there, do I think it will? No, but I'm willing to go long there for technical and fundamental reasons. I wouldn't have sold 150 puts when amazon was 180 but down here, i'm not scared and position my book as such on all my names, typically a beaten down name that I think is a good one, and I go to a sillier level. It's like if you saw a $2m home for sale in your neighborhood for $1m and you put an offer at $600k. If your offer was accepted, you would be ok with it, right? That's how I view my style.
Just amazing performance! Even though you say anyone can do it, I am very impressed! A lot of people read charts, and they do it professionally. Two that come to mind are David Keller who does the daily Final Bar on Stock Charts (https://www.youtube.com/c/StockChartsDotCom/videos) and Tom (from Australia) of FxEvolution (https://www.youtube.com/@fxevolutionvideo/videos). You look at a relatively small number of not overly sophisticated chart features. They both look at far more chart features than you do. Yet you seem to see things so much more clearly.
A few comments/questions if you don't mind.
o You seem to take positions that you don't mention in your recaps. For example, you Monday book showed an XLV credit spread and a closed out position in KO. Yet I don't recall you ever mentioning either of these.
o In your write-up today, you urge everyone to read your table and notes on unusual option activity. Since you don't act on all the stocks you mention, how should a reader decide which to pursue. It seems more sensible simply to look at the options you actually sell.
Out dogs want to go out. So I'll close this comment and start another one with my final question.
1) it's funny you say that, there's multiple ways to get to the final conclusion and alot of people like to make their lives unnecessarily complicated. The simplest horizontal lines can tell the story most of the time. I find many "chartists" love to make things appear more complicated than they are to make those who follow them think they're following something far more complex than it is, just honest opinion, and I see it alot on twitter with the lingo and timeframes used by many.
2)I believe I put those on at the end of 2022 during that week I didn't post. Otherwise I post everything I do everyday.
3) I can't follow every trade, I try to find the oddest and most interesting and I try to size into them. The Amazon 10,000 lot of puts I mentioned yesterday caught my eye bc it lined up with the chart. I keep notes of unusual activity in names I follow, hand written of course, and I go over it daily and I try to see how funds position. I esp pay attention to the large puts sold more than anything else because I am a put seller and those aren't up for debate like calls. With calls, they could be hedges, they could be longs, there really is no way to know, only educated guesses can be made.
4) How do I decide? A name has to be near lows or have a catalyst like an activist or past good earnings. I try to hone in on a small group of names and focus on them. I've said before that I'm a believer in post earnings announcement drift and I try to trade names AFTER they've posted a good quarter.
Hi James - love the daily update! Do you mind me asking from where do you mine the options data that you share in your newsletters?
I just use my terminal but there’s lots of services out there for a few hundred bucks a month that offer it up. I doubt they break it down how I do but they’ll show you all the big trades and then you can look at whether it was put on the bid/ask etc and figure out what it was.
Thanks. I guess i will rely on the data you share everyday rather than spending money and brainpower on another service.
I won’t let you down
Final question. These days I tend to think of the size of a position (actually the size of a commitment for a given underlying) in terms of the aggregate maintenance requirement for all the positions in the underlying. When that amount goes beyond about 3% of my account value, I start to feel uncomfortable and think about trimming it. Do you have any rule of thumb in that regard? Is there a mental limit you tend to impose on your positions?
so here's my take on this and I know many will disagree but for me, if you're not willing to go to 50-100% of your book on a position in the short term, then you don't have the conviction on the name.
Think about that for a moment, I'm a big believer that diverisification is the enemy of great returns, I've always managed just a handful of positions and I don't believe in scattering out. You see me, I lever into names, strategically, far lower than they've been but I still am not scared of getting in names at certain levels. I guess the reason I'm not "uncomfortable" so to speak is because this is my trading account and in my head even if it goes to $0 I wouldn't be homeless and on the streets. With any trading account you have to be using money you aren't worried about losing. Would I be upset years of hard work is lost? Absolutely, and no I don't anticipate that ever happening, but this isn't my style. Even my long term holdings I've told you it's just a handful of names like Amazon,Google,Microsoft,EPD,etc.
So in regards to position sizing it's like I always say, we all have different goals, tolerance levels, etc and there isn't a one size fits all number. You can see from my sizing, I'm willing to put 75% of my book in Amazon at $70 if it closed the year there, do I think it will? No, but I'm willing to go long there for technical and fundamental reasons. I wouldn't have sold 150 puts when amazon was 180 but down here, i'm not scared and position my book as such on all my names, typically a beaten down name that I think is a good one, and I go to a sillier level. It's like if you saw a $2m home for sale in your neighborhood for $1m and you put an offer at $600k. If your offer was accepted, you would be ok with it, right? That's how I view my style.
Hi James,
Just amazing performance! Even though you say anyone can do it, I am very impressed! A lot of people read charts, and they do it professionally. Two that come to mind are David Keller who does the daily Final Bar on Stock Charts (https://www.youtube.com/c/StockChartsDotCom/videos) and Tom (from Australia) of FxEvolution (https://www.youtube.com/@fxevolutionvideo/videos). You look at a relatively small number of not overly sophisticated chart features. They both look at far more chart features than you do. Yet you seem to see things so much more clearly.
A few comments/questions if you don't mind.
o You seem to take positions that you don't mention in your recaps. For example, you Monday book showed an XLV credit spread and a closed out position in KO. Yet I don't recall you ever mentioning either of these.
o In your write-up today, you urge everyone to read your table and notes on unusual option activity. Since you don't act on all the stocks you mention, how should a reader decide which to pursue. It seems more sensible simply to look at the options you actually sell.
Out dogs want to go out. So I'll close this comment and start another one with my final question.
Thanks for all you do for us.
Hey Russ,
1) it's funny you say that, there's multiple ways to get to the final conclusion and alot of people like to make their lives unnecessarily complicated. The simplest horizontal lines can tell the story most of the time. I find many "chartists" love to make things appear more complicated than they are to make those who follow them think they're following something far more complex than it is, just honest opinion, and I see it alot on twitter with the lingo and timeframes used by many.
2)I believe I put those on at the end of 2022 during that week I didn't post. Otherwise I post everything I do everyday.
3) I can't follow every trade, I try to find the oddest and most interesting and I try to size into them. The Amazon 10,000 lot of puts I mentioned yesterday caught my eye bc it lined up with the chart. I keep notes of unusual activity in names I follow, hand written of course, and I go over it daily and I try to see how funds position. I esp pay attention to the large puts sold more than anything else because I am a put seller and those aren't up for debate like calls. With calls, they could be hedges, they could be longs, there really is no way to know, only educated guesses can be made.
4) How do I decide? A name has to be near lows or have a catalyst like an activist or past good earnings. I try to hone in on a small group of names and focus on them. I've said before that I'm a believer in post earnings announcement drift and I try to trade names AFTER they've posted a good quarter.