All trades this week were profitable except for one, adding to the bank of gains for the week. The only trade that had to be “Red Rolled” was the $210 short call which got pressured because of the sudden lift in price this week on AAPL. In order to get credit on the roll, I had to move it all the way out to Sep 19th $215. 

5 of the 7 trades this week returned over 90% on their sale versus cost. One was 49% gain, but notably, that was a trade that previously was a “loss” that was rolled forward.  This is basically one of the main pillars of my theory in rolling losers until they become winners. In this case, it was only one roll, or one period of carrying a previous loser forward before it became a winner. This month I began to actually include a tag on any trades that are considered a “Red Roll” adding a #1 or #2 in order to see just how many rolls does one have to do before a loser turns into a winner.

A “Red Roll” is basically a trade that has gone bad. There are two ways to handle this, one is closing the old trade as is, and carrying the entire roll cost into the new trade. The other method is to close the old trade flat, basically splitting the cost of rolling the trade forward by recording part of it in the rear view mirror, and part of it in the forward looking new trade.

At the end of the day, no matter how I do the accounting, profit is made up of money coming in minus money going out. The practice of documenting it in a certain way just helps mentally to decide when closing or rolling a trade whether it needs an adjustment in one direction or another to continue on the path to success.