Saturday, November 28, 2015

Winner winner Chipotle dinner

I stumble into a huge winner on CMG. I was assigned last Friday at 545 and sold Monday for 567. Other than that the week was quiet. Here are the trades: (c = calls, p = puts, sell means sell-to-open, last number is price per contract, all are third week expiration unless noted with a W).

Mon My lucky day as I sell CMG shares for a big winner.
Sell CMG shares @567.79

Sell BA Dec 135 p 31 reestablish long
Sell XOM Dec 70p 22 new long

Sell JBLU Dec 23 p 20 reestablish long
Sell AMZN Jan 555 p 277 rebalance

Tue Sell AMZN Jan 800 c 151
Sell FB DecW1 111 c 19

Sell IWM Jan 98 p 23
Sell MCD Dec 100 p 18

Wed Sell NKE Jan 110 p 48
Sell TSO Dec 103 p 38

Sell V Jan 70 p 28
Sell DIS Jan 97.5 p 28
Sell AMZN Dec 580 p 113

Fri Sell DIS Jan 130 c 37
Sell DIS Jan 92.5 p 33

Saturday, November 21, 2015

Monthly: Big losers ruin the month, 52-7 Grade C-

I count 52 winners, 7 losers for the November option cycle. Unfortunately, some of the losers were big whoppers (CMG was the biggest loser) and my account was down a bit for the month. So the grade is C- which is below average. Overall, a disappointing month of trading. I have less time for the stock market during the fall. The time crunch will tend to get worse until Christmas.

The good news? I stayed relatively disciplined, following my trading rules and for the most part avoiding the temptation of revenge trading. Typical revenge trading is trying to make up for a loss by being more aggressive.

Friday, November 20, 2015

Weekly: Bush-whacked again

Two stop losses triggered near the worst levels, ruining my trading week. CMG and EXPE dipped then rallied. The dip taking some positions at near the worst levels. As I often write, this will happen to any trader that uses stop losses, or mental stops. The alternatives are not to use stops, or perhaps use time related stops. A few will even double down on losers. My schedule hasn't left all that much time for stock or option trading or blog updates. I'll do what I can but I few posts may be a day or two late.

Here are the trades from my sour week of trading (c = calls, p = puts, sell means sell-to-open, cover means buy-to-close, weeklies denoted by w suffix, NovW4 would be November week 4, all others are third week expiration)

Mon 11/16/15 Sell FB Nov 108 c 19
Sell EXPE Nov 130 c 28

Sell MCD Dec 95 p 32
Sell AMZN Dec 740 c 94

Tue Sell FB Dec 95 p 58
Sell V Dec 70 p 22

Two options cross their strike price and that is my mental stop. I get out for huge percentage losses:

Cover EXPE Nov 120 p 104 about a 300% loss
Cover CMG Nov 580 p 603 about a 600% loss. Ouch!

Sure I could hold and hope, but my trading plan is to cover if the sold option crosses over strike price. The most pain cases are when the stock immediately reverses. That ugly and painful scenario has happened more times than I want to think about.

Wed Sell FB DecW1 100 p 39

Thu Sell AMZN Dec 570 p 233
Sell NKE Dec 110 p 60

Fri Sell AAPL Dec 100 p 23

Saturday, November 14, 2015

Weekly: Thoughts and prayers for Paris France

First, our thoughts and prayers go out to the people of Paris France. Events on that scale, that keep investment losses or gains in perspective. 

The U.S. stock market tumbled. Some stocks such as Nordstroms JWN got hit incredibly hard. Part of me wants to say I saw it coming, but that might be revisionist hindsight thinking. Just a week ago, I wrote about missing the boat for the most recent rally. 
In any case, it was a decent time to be a chicken, and that may have been the best description for my market stance. I was down for the week, but the damage was modest. I some some strangles on AAPL, AMZN and FB, and went far out of the money. I believe every new position for the week is in the red, but that will tend to happen when the market moves down sharply.

Here are the trades: (c = calls, p = puts, sell means sell-to-open, all are third week expiration unless noted).

Mon 11/9/15 Sell BRKB Dec 125 p 53

Wed Sell CMG Nov 580 p 75

Sell AAPL Dec 90 p 25 (strangle)
Sell AAPL Dec 130 c 53

Sell AMZN Dec 550 p 136 (strangle)
Sell AMZN Dec 800 c 58

Thu Sell IWM Dec 100 p 21 (strangle)
Sell IWM Dec 124 c 17

Sell FB Dec 92.5 p 25 (strangle)
Sell FB Dec 125 c 20

Saturday, November 07, 2015

Weekly: Missing the boat

For the most part I have been too cautious, too delta neutral during the recent big rally. I expected another leg down into late November. Instead, it has been rally mode for SPY and many stocks. AMZN has had a huge move after the earnings pop and I feel like I missed that boat and many others. Interest rates ticked higher this week after the employment report.

Highlights of a relatively quiet and tepid week of trading for me include small new long positions in FB and TSLA on earnings. I didn't have the guts to add to CMG on news and a downgrade. 

Here are the trades (c = calls, p = puts, sell means sell-to-open, weekly options have the W suffix, NovW2 means week two, all others are third week expration. The last number is price per contract.

Mon 11/2/15 Sell CMG Nov 690 c 35 rebalance as Chipotle moves down on news

Sell IBB Nov 280 p 55 rebalance
Sell DIS Dec 100 p 71 rebalance

Tue Sell DIS Nov 104 p 38 rebalance

Wed Sell TSLA NovW2 200 p 40 earnings
Sell SPY Nov 199 p 31 rebalance

Thu Sell FB Nov 100 p 28 earnings
Sell IWM Dec 104 p 43 add to longs

Sell DIS Dec 130 c 34 rebalance
Sell TSO Dec 95 p 57 rebalance

Saturday, October 31, 2015

Weekly: burned in IBB

A rally in biotech stopped out some position in IBB for huge losses. IBB rallied over my 330 strike price on sold calls and that is the stop level.

Overall, a tiny loss for the week. Other highlights include new long positions in EXPE on earnings, and HOT on takeover rumors. The weekly options I sold on TSLA came in, despite some turbulence in the price action.

Here are the trades (c = calls, p = puts, sell means sell-to-open, weekly options denoted by W suffix, so NovW2 would be November week two, all others are third week expiration) The number at the end is price of option, usually the premium collected from selling the option.
Mon 10/26/15 Sell IBB OctW4 282.5 p 44 rebalance
Sell SPY NovW1 199p 25 rebalance

Tue Sell MCD Nov 120 c 25 hedge
Sell JBLU Nov 27 c 15 hedge
Sell IBB OctW5 300 p 35 rebalance

Wed Sell IBB NovW1 290 p 62 rebalance
Sell IWM Nov 107 p 23 add
Sell HOT Nov 65 p 25 chart

Cover (buy-to-close) IBB OctW5 330 c 390 huge losses as biotech rallies about a 400% loss
Sell SPY NovW2 199 p 36 rebalance

Thu Sell TSO Nov 92.5 p 25 rebalance

Fri Sell IBB Nov 365 c 52 reestablish
Sell EXPE Nov 120 p 30 new long on earnings

Saturday, October 24, 2015

Weekly: Boom goes the dynamite

Stock market explodes to the upside on Thursday and Friday. Unfortunately, I have a painful down week. SKX Sketchers craters -30% on their earnings report and I take about a 1300% loss on some sold puts. It is always painful to lose money, but it seems like it hurts more when the overall market is up. Another big loss was on some sold AAPL calls. A third gut wrencher was selling strangles on TSLA Telsa and then having Consumer Reports pan the Model S car and the stock gets hit.

The philosophical perspective is that I've had a decent run for a little bit and my luck was due to revert to the mean and balance out to the bad side. If a trader sells enough premium some big moves are going to against you.
I initiate new long positions in BA Boeing, BRKB Berkshire, and MCD McDonalds.

Here are the trades (c = calls, p = puts, sell means sell-to-open, weeklies denoted by W suffix, e.g. NovW1 is November week one, all others are third week expiration).

Mon 10/19/15
More layers on the biotech etf:
Sell IBB OctW4 290 p 45
Sell IBB OctW4 335 c 30

Sell BRKB Nov 125 p 54 new long, strike is below recent lows

Tue Sell AAPL OctW5 92 p 20 rebalance
Sell IBB OctW5 330 c 95 rebalance

Sell TSLA strangles, way otm. A short time after I get in, Consumer Reports sends TSLA stock down, dropping the Model S from its best car short list.
Sell TSLA OctW5 195 p 35
Sell TSLA OctW5 250 c 24

Wed Sell IBB OctW4 320 c 35

Sell IBB OctW5 330 c 70
Sell TSLA OctW5 230 c 65

Sell Disney strangles:
Sell DIS Nov 95 p 34
Sell DIS Nov 124 c 20

Thu Sell MCD Nov 97.5 p 37 new long
Sell BA Nov 120 p 20 new long position

Sell SPY NovW1 196 p 36
Sell MCD Nov 100 p 42 add to longs

Fri Cover AAPL OctW4 116 c 234 1500% loss
Cover SKX Nov 35 p 500 about a 1300% loss