← Go back to All Blogs
  • entry
    1
  • comments
    425
  • views
    3,341

Diary of a WTI options market maker

GL

63,362 views

I have been a trader since 1980. I started trading options in late 1983. I lost every penny of a $1.6 million portfolio in the crash of October 1987. What doesn't kill you makes you stronger. I have a undergraduate degree in Finance. I have a Masters degree in Economics. I have completed about half the requirements of a PhD in Financial Economics. I don't advise pursuing a PhD unless you want to be a teacher. It will not make you a better investor/trader. I developed a trading strategy involving shorting calls against GUSH in 2015 that I managed for a trucking firm to alleviate the strains of high fuel prices. Early in 2019 the owner of the trucking company sold the company and devoted his time to managing just the strategy itself. He said that he expects to make more profit in 2020 from writing calls against GUSH and writing puts and calls against his WTI contracts than his 32-truck transportation company ever did...all from his home...in his pajamas.

  • Like 4
  • Haha 1
  • Upvote 3


425 Comments


Recommended Comments



OilProspector

(edited)

rog1111 closed CL spread position...

 

Screen Shot 2020-04-02 at 5.33.52 PM.jpg

Edited by OilProspector

Share this comment


Link to comment
9 hours ago, OilProspector said:

rog1111 closed CL spread position...

 

Screen Shot 2020-04-02 at 5.33.52 PM.jpg

Thanks OP. I plan to hold the RBOB spread for a few months, I'm looking for parity, but will monitor CV19 developments

  • Upvote 2

Share this comment


Link to comment
OilProspector

(edited)

Gary LeBlanc Portfolio: Expiration of Options on 04/16/20 (May Series)

Screen Shot 2020-04-16 at 4.45.11 PM.jpg

Edited by OilProspector

Share this comment


Link to comment

Okay...I love taking chances and will put in a trades on Monday...still learning yet I have been trading for 26 years

Share this comment


Link to comment

No matter what you do, trade, invest, etc there is no free lunch, however luck does come into play.  Smart guys recognize luck (good and bad) for what it is.  The way to make money is to stay ahead or as near to the front of the market as you can using ones analytical skills and understanding of dislocations to see/recognize opportunity before the lemmings do.

Share this comment


Link to comment
On 4/18/2020 at 12:25 PM, Paul k said:

Okay...I love taking chances and will put in a trades on Monday...still learning yet I have been trading for 26 years

Well Paul... did you put on a trade?

Share this comment


Link to comment
OilProspector

(edited)

Gary LeBlanc Portfolio: CLK20 expiration on 04/21/20 (May Series complete)

** Split final price based on high/low of the day ((-16.74) - 13.86)

Screen Shot 2020-04-21 at 3.37.00 PM.jpg

Edited by OilProspector

Share this comment


Link to comment
rw

(edited)

On 4/2/2020 at 4:17 PM, rog1111 said:

July v Aug RBOB is trading at a large discount. I'm assuming it will narrow by Summer, due to improving US virus scenario and a little bit of seasonal impetus. Therefore:

Long 6 RBN0 at 0.7029

Short 6 RBQ0 at 0.7566

It's a waiting game for sure, so we'll see

I decided to get out of this one this evening while ahead. Not my original plan to hold well into June, but summer demand seems increasingly uncertain, so time to re-think and move on.

STC 6 RBNO at 0.7154 ave

BTC 6 RBQ0 at 0.7403 ave

As futures spreads are going a bit off topic here, I'll post future trades on another thread.

Edited by rog1111

Share this comment


Link to comment

Initiated positions and will scale in with oil at 12 in USL and XLE, TD Ameritrade won’t let me trade June or July WTI contracts

Share this comment


Link to comment

I was reading this thread page by page from page 1. Just thinking, "What will it look like in late Feb and then Early March, Mid March, Early April, Mid April, and now?"

Rather than going the long route after 5 pages, I jumped right to the end.

Reading early, Gary Leblanc's entire strategy was simply buy a future and sell covered calls against it? 

Try to buy your way out early at ~25% of the value and sell another covered call for another week out OR roll the money into a new future.   

Only issue, and it seems to be fully presented here:  No downside protection? (at all?)

Share this comment


Link to comment
OilProspector

(edited)

9 hours ago, Chris Tarjeft said:

I was reading this thread page by page from page 1. Just thinking, "What will it look like in late Feb and then Early March, Mid March, Early April, Mid April, and now?"

Rather than going the long route after 5 pages, I jumped right to the end.

Reading early, Gary Leblanc's entire strategy was simply buy a future and sell covered calls against it? 

Try to buy your way out early at ~25% of the value and sell another covered call for another week out OR roll the money into a new future.   

Only issue, and it seems to be fully presented here:  No downside protection? (at all?)

My first thought was hummm... (sarcasm alert) let me read the last chapter of this novel and then ask a bunch of questions about what happened in the book. 😉

Yep... Gary was unfortunately full of hubris. For someone that said they previously lost $1.6MM he seemed to forget all about that. He traded as though a "Black Swan" could never happen. Oh well. Another one bites the dust.

 

Edited by OilProspector
  • Rolling Eye 1

Share this comment


Link to comment
On 4/27/2020 at 2:12 PM, rog1111 said:

I decided to get out of this one this evening while ahead. Not my original plan to hold well into June, but summer demand seems increasingly uncertain, so time to re-think and move on.

STC 6 RBNO at 0.7154 ave

BTC 6 RBQ0 at 0.7403 ave

As futures spreads are going a bit off topic here, I'll post future trades on another thread.

Nice trade!

Screen Shot 2020-04-29 at 7.08.37 AM.jpg

Share this comment


Link to comment
11 hours ago, OilProspector said:

My first thought was hummm... (sarcasm alert) let me read the last chapter of this novel and then ask a bunch of questions about what happened in the book. 😉

Yep... Gary was unfortunately full of hubris. For someone that said they previously lost $1.6MM he seemed to forget all about that. He traded as though a "Black Swan" could never happen. Oh well. Another one bites the dust.

 

Gary was arrogant, he lashed out at me and others on investing.com, I always called him out on his terrible trades and he simply accused me of being a fraud, like I always said, the arrogant never last.  

Share this comment


Link to comment
On 4/29/2020 at 4:10 PM, OilProspector said:

Nice trade!

Screen Shot 2020-04-29 at 7.08.37 AM.jpg

Thanks OP. Despite huge movements in the absolute price of RBOB, particularly the front month, the Jul/Aug spread was pretty steady

Share this comment


Link to comment
On 4/29/2020 at 6:07 PM, Mark McAnallen said:

Gary was arrogant, he lashed out at me and others on investing.com, I always called him out on his terrible trades and he simply accused me of being a fraud, like I always said, the arrogant never last.  

Sure seems like "John Mackenzie" is the alter ego of Gary Leblanc. Hummmm.... 

Share this comment


Link to comment
On 5/6/2020 at 11:06 AM, OilProspector said:

Sure seems like "John Mackenzie" is the alter ego of Gary Leblanc. Hummmm.... 

My thoughts exactly!

Share this comment


Link to comment
On 5/6/2020 at 11:06 AM, OilProspector said:

Sure seems like "John Mackenzie" is the alter ego of Gary Leblanc. Hummmm.... 

Who are you on there sir?

Share this comment


Link to comment
OilProspector

(edited)

On 5/8/2020 at 3:47 PM, Mark McAnallen said:

Who are you on there sir?

Not sure I understand your question. Please elaborate.

Edited by OilProspector

Share this comment


Link to comment
2 hours ago, OilProspector said:

Not sure I understand your question. Please elaborate.

Your screen name on investing?

Share this comment


Link to comment
21 hours ago, Mark McAnallen said:

Your screen name on investing?

Gotcha... SineWaveTrader

Share this comment


Link to comment

Gary LeBlanc Portfolio: Expiration of Options on 05/14/20 (June Series)

Screen Shot 2020-05-15 at 6.22.11 AM.jpg

Share this comment


Link to comment

Gary LeBlanc Portfolio: CLM20 expiration on 05/19/20 (June Series complete)

Screen Shot 2020-05-22 at 7.26.22 AM.jpg

Share this comment


Link to comment

Guest
You are posting as a guest. If you have an account, please sign in.
Add a comment...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.