DTE was 46 days, I opened M3 when the market was down in February. I was hoping for volatility to come down which never happened in that extend. Also, the intermediate market rally didn’t help and I was hesitant to roll structure up immediately because I was fearing the market would be backlashing on me. After four weeks I was up a few hundred $ on approx. 30k margin (14 RUT lots) but never near my profit target which is around 5%. Butterfly prices were low compared to last years low volatility environment.
Posted by slyfoxhd
Sounds like you placed the trade in the middle of the storm
The volatility did come down but maybe not from your trade reference point
I think that is a difficult time to manage the trade
One thing about the M3 I did not like was buying the call so that's why I have not even tried it
I was just going to suggest what I learned from last year was to lower your profit expectations
I looked over my trades and they were all profitable after 30 days but as I held on to them longer some of the profits got evaporated and even turned into losses and as most trades were only making around 2% a month I decided to use that as my exit instead of 14 or 21 DTE or whatever the rule calls for
This way you always get out with a profit and can move on to the next trade and don't have to worry about making adjustments to keep it profitable
Think about it, if you can make 2% per month that's 24% annualized that beats the s&p most of the time
So I either get out after 30 days or 2% whichever looks more profitable at the time
Even better if you could do 2% per week that's 104% a year Of course you are not going to be able to do that all the time but it can be done sparingly
I recently watched the Amy Meissener presentation and even she is working with this magical 2% figure
although she is using it with 14 days but it's a similar concept
I think this is a good way to manage the trade by locking in profits early
It's working well for me so far I have not had a loosing trade since then (about the middle of last year)