The Sad Tale of M.L.O.T.T.

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In trading, few things hurt worse than money left on the table. (In the unlikely event any of you are unacquainted with this term, it refers to profits forsaken because you were too impatient, scared, or what-have-you and missed out on extra money).

It’s virtually a truism in trading that you’ll score 8% on a given trade and it goes on to throw off 90% in gains. It happens all the time, but it happens CONSTANTLY in highly opportunistic and volatile markets like this one.

I am no stranger to this situation, particularly since my own emotional and psychological makeup doesn’t lend itself to – – how shall we put this? – – stalwart, steadfast, fearless determination. I prefer to slip on a pink taffeta dress, maybe some matching pantyhose, and scurry around closing anything that has a profit.

I’m exaggerating a bit (except for the clothes part), but just in recent weeks, the spreadsheet below shows the positions I have CLOSED, with the “entry price” reflecting whatever price I got when I closed them. Shield your eyes, Frank.


As you can see, there are six positions that actually threw off TRIPLE DIGITS PROFITS after I sold them. And, overall, the average percentage gain AFTER I closed all these positions was about 50%. Ahem, if you’ll excuse me for just one moment:

Mad Tim

Thank you.

What have I learned from all this? Not a damned thing. What am I going to change based on this? Nothing.

Because I’ve been down this road too many times to know that I’m going to force myself to behave differently in the future. Because in the immediate moment, when the future is UTTERLY uncertain, it takes a very special person to gaze steely-eyed and just stay put. As I read last week, “Be Right and Sit Tight.” Easy to say. Hard to do.

In my defense, I will say that the vast majority of my positions are still in place, and I have very intentionally selected long-dated options so that my natural tendency to flee, screeching, out of any given position, is diminished.

I can say, however, that the past few months have produced some incredible short set-ups, and I hope to God in heaven that this is the new normal. Since I’m able to capture about 20% of my POTENTIAL profits, maybe I’ve actually got a chance to do well here.