Friday, January 19, 2018

Monthly: Run your own race, 50-5, grade C-

I count 50 winners 5 losers for the January option cycle. The market went up like a rocket ship, leaving me behind. The grade is C-, a passing grade, but not a good one. There were some ghastly percentage losers in the 5. Some call buyers made 3000%+ on their way out of the money call buys. I was on the other side of some of those.

Year to date, my account is up 1.2%. Here are a few etfs, best to worst, for calendar 2018 (three weeks).

EEM +7.0% emerging markets equity
SPY +5.4% US large cap, SP500


IWM +4.1% US small cap Russell 2000
GLD +2.8% gold


SLV +0.3% silver
TLT -3.0% US 20 year treasury bonds
So it could be worse. I could be all in long on bonds.

The cliché that comes to mind is “run your own race.” Some readers might be marathon runners, or long distance bike riders. If the pack starts fast, or you get in with a fast group, it can be folly to try and match pace if that isn’t your plan.
Option premium sellers, especially those that tend towards delta neutral strategies, are likely to suffer during sharp up, or down moves.


Rule #1 is to live to trade another day. Despite the huge unexpected up move in the market, I managed a small profit. If this is a "bad" month for me, it is going to be another good year for my account.

Weekly: more of the same

The rally rolls on, though slows a bit. One TV person said if the market kept going up this fast, it would be up 150% for the year. I struggle in strong trending markets. Delta neutral works a lot better in flat, directionless markets.


Here are the trades (p=puts, c=calls, number near end is price per contract, sell means sell-to-open, cover means buy-to-close):


Tue Finally a reversal day.
Sell BA Feb 295 p 112
Sell KSS Feb 55 p 35


Sell TIF Feb 97.5 p 45
Sell UNH Feb 210 p 50 earnings


Wed The moon shot rally resumes.
Sell FB 182.5 c 20
Sell LRCX Feb 165 p 60


Sell BA 290 p 90

Sell MU strangle: Sell MU Feb 38 p 37
Sell MU Feb 50 c 14


Sell BRKB Feb 200 p 53
Sell UNH Feb 220 p 54


Sell BA Feb 285 p 67
Sell BA 280 p 60


Cover SPY Jan 256 p 02
Cover SPY Jan 240 p 01
Cover QQQ Jan 149 p 01


Thu Sell BA Feb 450 c 22
Sell UNH Feb 260 c 23


Fri Sell SHAK Feb 37.5 p 20
Cover KSS Jan 67.5 c 10 for a tiny gain.

Friday, January 12, 2018

Weekly: close your eyes and buy

The zombie bull tramples would-be bears as the market accelerates up. I eek out a minor gain for the week. It is galling to watch the market rocket higher, and get so little. With all that, if this is as bad as it gets for me, to have tiny gains, during a terrible trading week, that isn’t all bad. Some of the more bearish, more stubborn traders suffered huge losses on the week.

Overall, not a lot worked for me this week. I made a foray into KODK and got burned, though can get out with a small profit if it doesn’t rocket up from here. I rolled BRKB and watched it continue to roar higher. I cover some positions for huge percentage losses. So far this year, the bulls feasted, All I have is a small morsel, but am thankful for that because true market bears have been completely destroyed.

Here are the trades
(p=puts, c=calls, number near end is price per contract, sell means sell-to-open, cover means buy-to-close):
Mon Cover NFLX Jan 210 c 545 for a 3000% loss. Well that one hurt.
Sell NFLX Jan 235 c 19
Sell NVDA Jan 255 c 16

Tue
Roll BRKB for 197 credit
Cover BRKB Jan 200 c 437 for 35% loss
Sell BRKB Feb 200 c 634

Sell BA Feb 380 c 24
Sell BA Feb 265 p 73
Wed Sell AVB Feb 155 p 35
Sell AVB Feb 180 c 45

Sell BA Jan 290 p 15
Sell SPG Feb 180 c 35

Sell KODK strangles: Sell KODK Jan 7.5 p 50
Sell KODK Jan 17.5 c 25

Thu
More losses as the rally rolls on.
Cover BA Jan 325 c 465 for a 3000% loss. Ouch again
Cover KODK Jan 7.5 p 75 for a 50% loss
Cover AVB Jan 170 p 140 for 50% loss

Sell BA Feb 400 c 22
Sell BA Feb 275 p 80
Sell BA Jan 300 p 18

Sell KODK Jan 15 c 15

Fri
The rally rolls on. Boeing chart looks parabolic. Facebook stumbles.
Sell BA Feb 275 p 57
Sell FB Jan 190 c 18

Sell JPM strangle Sell JPM Feb 105 p 42
Sell JPM Feb 120 c 27

Sell KSS strangle Sell KSS Jan 67.5 c 15
Sell KSS Jan 59 p 15

Saturday, January 06, 2018

Don’t do anything stupid

The market roars up four days in a row, up about 2% for the week. I am left at the train station, mostly left behind by the rocket rally. The phrase that comes to mind is “don’t do anything stupid.” Meaning, don’t chase the rally, don’t ignore it either, don’t stand in front of the train. What does that leave? A few measured moves, waiting for good setups post-earnings.

Yes, we would all like to be brilliant traders, able to ride every move, but reality is not that way for me. My predictions are about like coin-flips, and I would have guessed down, if I had to guess a direction for the first week of the year. Thank goodness I didn't do that. As is, I eek out a small profit for the week and regroup for the upcoming earnings.

Here are the trades
(p=puts, c=calls, number near end is price per contract, sell means sell-to-open, cover means buy-to-close):

Tue Tech stocks lead the way higher on the first day of trading in 2018.

Sell FB Sell Jan 170 p 35
Sell NFLX Jan 230 c 19
Sell NFLX Jan 182.5 p 65
Thu QQQ backratio for credit
Buy QQQ Mar 150 p 127
Sell 2x QQQ Mar 145 p 81 each

Fri The 2018 rocket launch rally continues for a fourth day. It gets uncomfortable in some calls I sold. I eek out a small gain for the week, but the opportunities were so much greater than the result.

Sell BA Jan 235 c 18
Sell FB Jan 175 p 31

Sell IWM Feb 140 p 28
Sell NFLX Jan 190 p 36

Sell NFLX Jan 190 p 38
Sell QQQ Feb 145 p 27

Sunday, December 31, 2017

2017 Year 652-66 Grade B-

I count 652 winners, 66 loser for the 2017 year. I am up about 18% for the year, which is right behind SPY. Overall, I am pleased. I’ll take +18% every time.

My best dollar winners over the course of the year:
BRKB NVDA TSLA SPG UNH

losers: BA PANW FL ULTA.

It was another remarkably calm market year. So many kept waiting for volatility to return, but for the most part, they were disappointed. So many on the Internet keep looking for a crash. Many lack the basic understanding that crashes are rare events. Real market crashes might be once every 20 to 30 years. Corrections, bear markets are more common. If we could time all the market hiccups we could print money.

Put sellers did very well, some call sellers saw losses. Many of my big loser trades involved sold calls.

Here are a few etfs and how they did in 2017:

EEM +34.6% emerging market equity
SPY +19.0% SP500, U.S. large cap

IWM +13.0% Russell 2000 U.S. small cap
GLD +12.8% gold

TLT +6.5% U.S. 20 year treasury bonds
SLV +5.8% silver

The main groups to lose money were bearish. One of these days, they will be right, but it wasn’t in 2017. Predictions tend to be for entertainment. Money management, risk management is where I tend to make my money. My predictions are no better than coin flips.

Saturday, December 30, 2017

Two weeks of trades

Not much exciting as the year winds down. There was some minor selling at the end of the year. For now, I’ll just report. I’ll try to get a 2017 summary post up in the next few days.

12/26/17 Tue Apple dips on news, I sell some way otm calls on a few tech stocks. Retail has a good day. I missed the boat on Macys.
Sell AAPL Jan 185 c 19
Sell FB Jan 190 c 26

Sell NFLX Jan 210 c 20
Sell QQQ Jan 145 p 22

Sell SPY Feb 243 p 44
Sell TIF Jan 98 p 82

Wed I do my first butterfly ever. The concept is to land on the center strike to make a huge profit. I target SPY 245 in April.
SPY April butterfly for 46 debit:
Buy SPY Apr 255 p 307
Sell 2x SPY Apr 245 p 192 each
Buy SPY Apr 235 p 126

Sell NFLX Jan 172.5 p 56

12/18/17 Mon After third-week expiration, I have a mountain of buying power. I open a few positions, way out of the money.
Sell BABA Jan 150 p 47
Sell IBB Feb 95 p 40

Sell QQQ Jan 149 p 32
Sell SPY Jan 256 p 40

Tue Sell NVDA Jan 167.5 p 47
Sell AAPL Jan 155 p 27
Sell IWM Jan 143 p 27

Wed Sell MCD Feb 150 p 38
Sell QQQ Feb 135 p 29
Sell SPG Feb 145 p 57

Thu Sell FB Jan 160 p 37
Sell MSFT Jan 80 p 17
Sell NFLX Jan 160 p 40

Sell ROKU Jan 35 p 30
Sell XLU Feb 48 p 14

Saturday, December 16, 2017

Monthly: Zombie Bull and the Tax Bill, 62-4 Grade B+

Some big losers mar an otherwise stellar month. The near invincible bull market continues to roll for another month. The likely passage of the tax bill brings good cheer to Wall Street.

Here are a few etfs year to date:
EEM +31.9% emerging market equity
SPY +19.2% S&P 500, U.S. large cap

IWM +12.9% Russell 2000 U.S. small cap
GLD + 8.7% gold

TLT + 7.7% U.S. 20 year treasuries
SLV + 0.3% silver

It is a bit remarkable that all are up for the year. IWM was about break even a couple of months ago. GLD and SLV started the year strong and have faded. Perhaps most surprising is a good year for bonds, despite several Fed rate hikes.

My account is up 17.9%, which is nothing to sneeze at. However, it is behind SPY’s bull market year. I haven’t had much time or energy for trading lately. I’m sure readers had remarkably good results this year. I try to remain in learning mode at all times. The market is always evolving.

Weekly: Holidays markets are early

The relative calm of holiday markets arrive early. As the zombie bull market continues to slowly lurch forward. Hardly anything seems to cause as much as a bobble in the march forward. It continues to be a remarkably unnaturally calm market.

Here are the trades (p=puts, c=calls, number near end is price per contract, sell means sell-to-open, cover means buy-to-close)

Mon Sell ULTA Jan 195 p 95
Sell SHAK Jan 52.5 c 25
Sell SHAK Jan 42.5 p 55
Cover SPY DecW4 241 p 04 for profit

Tue Sell BA Jan 250 p 53
Sell TSLA Jan 250 p 56
Sell WYNN Jan 140 p 44

Cover three trades for profit:
Cover TSLA Dec 225 p 01
Cover SPY Dec 240 p 01
Cover IWM Dec 135 p

Thu Sell YY Jan 80 p 35
Sell TIF Jan 87.5 p 49
Sell TIF Jan 110 c 35
Cover DE Dec 155 c 01 for profit

Fri Sell PYPL Jan 65 p 22
Sell YY Jan 80 p 40
Cover DE Dec 155 c 01 for profit

Saturday, December 09, 2017

Weekly: C’est la vie

It is a philosophical week that starts with more declines in tech stocks, then a modest recover. I close some positions for losses. I follow my rule to take the loss if the option crosses the strike price. It is painful to do. Twice as painful as the stocks bounce back after I get out. Still, all in all, I am up a tad for the week.

Losses are part of the game. Traders that never take a loss tend to be wizards, scammers or liars. On the Internet, it is mostly scammers and liars that claim never to lose. Often they have something to sell.

Here are the trades (p=puts, c=calls, number near end is price per contract, sell means sell-to-open, cover means buy-to-close)

Mon Dreams turn into nightmares as the market opens higher, closes lower. I take significant losses in my tech positions. I am down about 1.0% for the day.

Roll BRKB for 95 debit: Cover BRKB Dec 195 c 415 for loss
Sell BRKB Jan 200 c 320

Sell TSLA strangles Sell TSLA Jan 400 c 35
Sell TSLA Jan 200 p 45

Sell BABA Dec 190 c 30
Sell BABA Dec 187.5 c 56

Sell FB Dec 185 c 24
Sell NFLX Dec 197.5 c 74

Cover NVDA Dec 187.5 p 600 for a whopper loss
Cover NVDA Dec 260 c 02 for profit

Cover BABA Dec 220 c 02 for profit

Tue Cover BABA DecW4 170 p 545 for a huge loss
This is not the time to be ignoring my trading rules.

Wed Markets calm down, though I take another big loss in a tech stock (Palo Alto Networks)

Sell SPY SPY Jan 240 p 48
Sell LMT Jan 290 p 90

Sell WMT Jan 87.5 p 23
Cover WMT Dec 77.5 p 01

Cover SPG Dec 145 p 03 for profit
Cover PANW Dec 142 p 280 for a big loss

Thu I take profits to free up buying power
Cover QCOM Dec 50 p 01

Cover WYNN Dec 135 p 02
Cover AAPL Dec 145 p 03

Fri Sell MCD Jan 155 p
Sell BABA DecW4 160 p 30