This was a very annoying week.

I got whipsawed in the beginning of the week – death by a thousand tiny cuts – and so I switched strategies to loosen things up by the end of the week. And then THAT clobbered me.

Part of what killed me after the initial whipsaw at the beginning of the week was that prices more-or-less FROZE after that. Very stable. Very annoying if you are an options trader. So you end up losing a little bit of money two ways: First of all, you are losing time each day, which sucks the value out of an option contract. It may only be a dollar or three per contract, but over the course of a week, it adds up when you are dealing with a small account. Secondly, volatility is priced into options pricing as well. As the price stabilizes, volatility is bled out, which reduces the price of the option as well. When something that was swinging around a couple of dollars a day suddenly goes to moving only a few cents, the contracts get cheaper.

And so I found myself stuck in a situation where my positions weren’t moving against me very much at all – not enough to trigger any technical failures – but I was still losing money pretty quickly. It was frustrating, as I couldn’t really see I was doing anything wrong, but I was uncomfortable holding on. So I’ve taken pretty substantial losses, but I still have positions on the table. We’ll see what happens next week.

Oh, and I tried something unusual this week. As Friday was expiration day, and I’ve noticed a tendency in the past for stocks to return to their opening prices on expiration day, I tried to make a day trade at what seemed like the low point of the day – a quick bullish scalp in case the price rose closer to opening. It didn’t happen this time, though I managed to get out with a tiny profit that was almost enough to cover my transaction costs.