Saturday, November 22, 2014

39-8 for November Grade C


Modest profits for me, as I count 38 wins, 8 losses for the November cycle. Again, before anyone gets excited by the high win percentage, those tend to be the odds going in. I enter most trades with a 80% to 90% chance of a profit. The other side of high probability is that profits are small, and losses can be substantial. 

Traders buy options with a 10% chance of profit, hoping for a 10-to-1 payout or more. With the market moving straight up, many call buyers got rewarded. Call sellers like me got skewered. Fortunately, I am one to take my losses (vs. wait and hope or doubling down), so my losses were contained, though painful.

I covered the call side of many short strangles for losses: AMGN ASH HON SPY VRX YHOO. For some positions I resorted to buying stock because of wide spreads on the options. Buying stock means adding capital and risk, but helps with the bid/ask spread. Another cost is an extra level of commissions for assignment, when the stock gets called away.

Some strangles came in safe, but the percentage was not what I wanted. During these straight up moves, I tend to lag an all-in long strategy. There is no getting around this for hedgers. The alternative is to be directional, and my history with directional trades is poor. Two recent examples are in gold and bonds (GLD, TLT). I recently bought calendar spreads, taking a long position in gold, short bonds, both directions were wrong. Gold went down, bonds went up. For gold, I reverse the position so I am at a profit. The bond position is near worthless now.

What next? There remain many red flags for the stock market. QE in the U.S. is ending. Bullish sentiment is high. Valuations are near red line, though not nose-bleed bubble territory. Again, my directional predictions tend to be no better than coin flips. This is one reason that I hedge the way I do, because it is a way to make money in the market while being just okay on direction. The risk management side came into play this past month and saved my bacon. While some losses were huge percentage losers, overall I made money.

Weekly: Same crap, different week

There is saying in Spanish, same crap, different day. This week was more of the same for those with hedged positions. The bull marches forward, bears get crushed. My trades include: a new long position in BBY, roll some covered calls on ASH, buy VRX stock to cover short calls. 

Lest, I sound whiny, it was a profitable week and month for me, so overall there are positives. However, during these straight up moves, I lag an all-in long strategy.
 
Fri Cover short FDX Nov 175 calls @174.5. I cover mid-day, rather than waiting until the last minute and a potential dance with the devil. FDX closed below 175, so I would have been better off holding. However, Federal Express traded all over the place, with a high over 176.

Roll ASH short calls: Cover short ASH Nov 110 calls, sell ASH Dec 115 calls @113.25. I bought shares of Ashland to cover short calls because of the wide spreads on the options. I was happy to let the stock get called, but I could buy back the call for a decent price and sold December calls at a higher strike. This adds risk and capital.
VRX and AMGN are going to get called away tomorrow. I bought shares of both to cover short call positions. Again, I bought shares because the spreads on the options were so wide. In the case of Amgen, I tried limit orders several times only to watch it climb ever higher. Ouch.




Thu Sell BBY Dec 34 puts @37.8. New long position in retailer Best Buy, which is up on earnings news today.

Sell IWM Dec 105 puts @116.1. Add a bit to longs in the Russell 2000 etf.

Tue Buy VRX shares to cover short Nov 140 calls @141.58. I add a lot capital and take on a lot more risk by buying shares of Valeant Pharma.

Position Summary:
long AMGN APC BBY BRKB DIS FDX GLD HON
long JWN MMM NKE UNH UNP VRX WHR YHOO
net long ASH IWM
net neutral SPY
short TLT
expired ILMN

Saturday, November 15, 2014

Weekly: return of the Zombie Bull

The Zombie Bull market continues to lurch forward. I am still paying for selling calls short about a month ago. This week is particularly frustrating because AMGN and ASH pull back from their highs after I bought shares to cover short calls. GLD bounces a bit. 

Some side notes are that the AAII sentiment (link) is near nose bleed levels. This week it is 58% bulls, 23% neutral, 19% bears, a danger sign for bulls, though they have been right for a while. The local CANSLIM meetup is disbanding because the most dedicated leader is moving on. Stock market meetups closing down, tend not to be the kind of thing that happens during bubble bull markets.

Fri I open December long positions in Nordstroms and Nike.
Sell JWN Dec 67.5 puts @75.1
Sell NKE Dec 87.5 puts @95.5

I cover a couple of options for a buck or two to free up that margin.
Cover short YHOO Nov 39 puts @51.2
Cover short NKE Nov 82.5 puts @95.1

Wed Cover short SPY Nov 204 calls @204.1. Another day, another short call covered for a huge percentage loss about 600% basis the premium collected. Phooey.

I open December long positions in Union Pacific railroad and Amgen
Sell UNP Dec 110 puts @120.2 .51
Sell AMGN Dec 145 puts @162.3 .45

Mon Buy ASH shares to hedge the short Nov 110 calls @110.77. Another busted short strangle, another scramble for damage control.

Cover FDX Nove 145 puts @171. I free up some buying power by covering these way out of the money puts. They are almost sure to expire worthless, but I am near the yellow line on buying power. I don't want to red line and face an unexpected and unwelcome margin call, especially with my current schedule with limited computer access.

Position Summary
long HON ILMN NKE UNH UNP WHR YHOO
net long AMGN APC ASH JWN
net short DIS FDX VRX
net neutral BRKB GLD IWM SPY TLT

Saturday, November 08, 2014

Weekly: plowing ahead

After recent losses, I plow forward. This week, I rebalance several positions by selling December puts. I hit another bump in the road (or rock in the field) with another big loss on some short calls, this time on YHOO. ASH is also near the strike price of those short calls. GLD and some oil related stocks finally have a relief rally after some relentless selling. DIS earnings disappoint. Here are this week's trades:

Fri Cover short YHOO Nov 48 calls @48.2. Another big loss on short calls, about 600% basis the premium collected. The rally in Yahoo has been substantial since the BABA IPO. The call side of my short strangles got crushed.

Wed I open December positions in 3M Corp, Anadarko Petroleum, United Healthcare and Whirlpool.

Sell MMM Dec 145 puts @155.0
Sell APC Dec 75 puts @91.5
Sell UNH Dec 82.5 puts @95.5
Sell WHR Dec 150 puts @173.0

Tue I open December positions in Honeywell and Nordstroms.
Sell HON Dec 85 puts @95.1
Sell JWN Dec 62.5 puts @71.9

Mon A busy day, nine trades, mostly rebalancing trades on existing positions. I sell some December puts to offset some of the short November calls that may be threatened. I make too many trades to notate the prices of the underlyings. Most are done between 45 minutes and 1:15 after the open. These days I have limited computer access, and that time is one of my trading windows.

Sell ASH Dec 95 puts
Sell DIS Dec 82.5 puts
Sell FDX Dec 145 puts

Sell IWM strangles: Dec 127 calls / Dec 103 puts
Sell YHOO Dec 41 puts
Sell VRX Dec 110 puts
Sell BRKB Dec 130 puts

Position Summary:
long HON ILMN MMM NKE UNH UNP WHR YHOO
net long AMGN APC BRKB GLD IWM TLT VRX
net short ASH FDX HON JWN SPY
net neutral DIS GLD UNH

Saturday, November 01, 2014

Seminar report: TDAmeritrade Marketdrive


I attend a day long stock market seminar sponsored by TD Ameritrade, CBOE and the CME. The presenters include Don Kaufman and John "The Geek" from ThinkorSwim, Tom Sosnoff from Tastytrade, education guys Russell Rhoades from CBOE and Pete Mulmat from CME.

Some might ask why attend a seminar when I've been trading for decades. Well, I am always open to learning something new, and I often get anecdotes about the mood of market participants. Also at this event there was a free lunch (Turkey sandwich and more).Unlike some similar events there was no hard sell, just a few minutes of information from CME and CBOE.

Don Kaufman leads off. He says the #1 reason beginners blow up their accounts is they trade too many contracts. Most people are going to be wrong some percentage of the time. Being wrong in options with a large position and the account gets blown up. Next is a discussion of theta neutral trades. The example given is TWTR vertical call spreads. With TWTR near $41.50, the $41/$42 call vertical prices out near the same 6 days out, a month out and three months out. I would have never guessed that. 

Kaufman says he is terrible at predicting market direction, but decent at risk management. The golden traders are good at both. The ones that lose all their money tend to be bad at both, risk management and direction. I am so-so on direction, a bit better at risk management.

Kaufman talks about his last trade on AAPL, a vertical call spread sold for a credit. He sold the 200/210 call spread with AAPL around 203 and watched it go to 243, maxxing out his loss. AAPL is now one of his "nemesis stocks," stocks that he no longer trades. I have a similar list, though after a year or more I might try again.

Kaufman says that most traders are either buyers of premium or sellers, that it is a rare trader that can be successful at both. I've never had much luck buying premium. I am only so-so at selling premium, but at least I make something. Kaufman is not big on back testing for finding strategies. He prefers looking at current pricing and extrapolating. For example, looking at the price of a January spread, and then a December, to perhaps get an idea of what the spread might price out at in a month with no price change.

Kaufman asks the 500 or so attendees, how many watch CNBC, only a very few hands go up. He says it is mostly noise now. He goes on to show the high correlation with SPY. 362 out 500 S&P stocks had an 80%+ correlation the past 10 days. This despite earnings season which some might think would create more dispersion.

The free lunch is decent (Turkey sandwich and more). After the end of the seminar, there is free beer and wine, and more snacks. During the break I notice a local guy and chat with him while we eat lunch. A third guy joins us. The first guy has mostly done stocks only, and very little with options. The third guy is three years in, and with the help of the many ThinkorSwim educational tools seems to know quite a bit. The catch is that brokers love option traders. The average option trader might be 10x as active as a stock trader and the commissions pile up for the broker. 
 
Russell Rhoades, CFA from the CBOE wrote a book called VIX. Not very many people talk to him during the breaks, so I don't get a good vibe from him. He does mention the launch of the new VXST (a nine-day VIX type instrument) and VXTYN a bond market volatility instrument.

The CME education guy, Pete Mulmat mostly focuses on how trading futures is much more capital efficient, because of the lower margin requirements. For example to buy or sell one /GC (gold 100 ounces), the opening margin is a mere $6600 or so to control about $120,000 worth of gold. Of course that 20x leverage can get a person in a lot of trouble. The recent tumble in gold would have wiped out all that equity for a long positon and resulted in a quick margin call if the full leverage was used.

The keynote speaker is Tom Sosnoff, founder of ThinkorSwim, now with Tastytrade and Dough.com. As always, Tom has an interesting perspective. He mentions lecturing 100 USC finance majors the night before. He came away disappointed that they seemed to know so little. 

One question for the finance majors was about the Friday market event. "What do you do" in response to the Bank of Japan news that they are selling yen to buy dollars? None of the USC students came up with a decent answer. Two people in the audience answer. One says he would buy the Nikkei. Another says he would buy yen. A third says to buy S&Ps. My gut response is "fade the move," which is what Tom Sosnoff did. He sold S&P sold Nasdaq and bought Euros. All three were green by the end of Friday. My observation is that it isn't always a good idea to fade the news, but in this instance it was the correct call.

Sosnoff presents a lot of evidence in favor of selling options, naked strangles. I remembered Don Kaufman's scold against back testing. I keep in mind that the last five years have been mostly good for option sellers. However, as my recent few weeks of trading have shown in a most painful way, the losses can be quite large from selling naked strangles, while the profits are capped at the premium collected.

I recall a similar seminar event a few years ago, where selling covered calls was the "in thing to do." Of course, the huge market rally made that only a so-so strategy going forward. Another big thing was selling iron condors relatively close in. Again, the big market rally would have made that strategy so-so going forward. So the caution is, that if they are telling 500 retail traders that selling strangles is a good idea, it might not work out so well going forward. This is from my perspective as someone that sells naked strangles quite often. 
 
There is more. There is a demonstration of Trade Architect, a new part of the TD Ameritrade website. A question on high frequency trading, and a lengthy answer. Some I am going to leave some out as this post is getting rather lengthy.

Friday, October 31, 2014

Weekly: Steamroller crushes option sellers (and da bears)

There is a popular analogy for strangle sellers, that it is like picking up nickels in front of a slow moving steamroller. Most of the of the time, the option seller gets the nickel. Once in a great while, there might be a slip and fall, a muscle cramp, or just inattention or too much boldness, and the steam roller flattens the person. 

Well, this week I got flattened as the monster stock market rally continued to roll forward, crushing some of my short call sides of strangles. Most notable was AMGN. I also did some fear based covering on Friday, near the top of the move on NKE and again on AMGN. All told, my account was down just a bit for the week. However, with yet another huge up week in the stock market, down just a tad, has me feeling like I've been through the ringer.

Being short calls was near the worst possible position to have during the last few weeks, and I have paid for it. On Friday I gave into some fear covering and covered near the worst levels of the move.

I can rationalize or hem and haw or take responsibility. What is done is done. All I can do is try and learn from the experience, the mistakes, and move forward. The glass half full perspective is that this is one of the worst trading periods in recent memory, and yet my account is only down a few percentage points from all time highs. 

One small highlight for the week is a new long position in WHR and some other recent longs going my way. Some low lights include covering calls on HON, YHOO, the already mentioned AMGN and NKE, and watching my once proud profits in GLD disappear and turn red. Thankfully GLD is a tiny position. Here are the ugly looking trades for the week:

Fri Another big up day for the stock market, another slightly down day for my trading account. While most others got some Halloween candy. I got some more lumps of coal :( 

Cover short NKE Nov 95 calls @93.4. I cover Nike calls near the worst levels. Fear based covering.

Cover short AMGN Nov 165 calls @163.4. Same for Amgen, covering calls near the highs of the entire move. Fear based covering.

Thu Sell AMGN Nov 152.5 puts @160.0. Yet, another damage control move on Amgen as the bull steamroller rolls forward. I try to sell some more November calls on GLD, but it keeps slipping lower so my limit order doesn't get filled. (Next day gold craters lower, yikes.)

Wed Buy AMGN stock sell Nov 165 calls @158.6. I place another limit order to close the short Nov 155 puts, still no fill. So I cancel that and do a buy/write to hedge my position. I add a lot more capital, and more risk in doing this.

Tue A truly painful day, as I chase AMGN higher all day with a buy to close limit order on my short calls. The spread is wide and I don't get filled as Amgen closes near the highs of the day. Another big loss is covering some short HON calls for a huge loss. Some traders use the analogy of picking up nickels in front of a steam roller for those that sell naked options. Well, today, I got flattened on some short calls. Overall, my account is only down a smidge, so I am over dramatizing, but the loss on the AMGN calls is approaching 2000% basis the premium collected. In other words, the call buyer has about a twenty times winner. Wow.

Cover short HON Nov 95 calls @45.2 1.69

Sell AMGN Nov 145 puts @155.0. I mitigate the disaster of the short calls by having layers of short puts.

Sell WHR Nov 155 puts @168.0. New long position in Whirlpool. WHR up on earnings.

Mon Cover short YHOO Nov 44 calls @44.4. Yahoo! keeps rising, and I cover for a big loss, about 800% basis the premium collected. I am still short Nov 48 calls, Nov 36 and Nov 39 puts.

Saturday, October 25, 2014

Weekly: Up is Down, Mercury Retrograde

Stock market up big, best up week of 2014. My trading account is up only a little. Highlights of the week include a new long position in ILMN, covering short calls for a big loss in MMM. One of the worst feelings is seeing the stock market up big time and my account down. Friends that know about my stock market activity tend to assume that an up market means good times for everyone and down markets the opposite. Option traders know that isn't always the case.

Thursday was a big up day in the market, and a down day for my account, not much fun in that. Being short calls on a stock that gaps up on an earnings report is a bad feeling. HON, MMM, YHOO recently had good reports and I was short strangles on all. I covered MMM calls for a huge loss, and may eventually cover the others.

Someome mentioned that Mercury is coming out of retrograde today 10/25/14. I know that many readers are tuning out with the mention of astrology. It doesn't matter what a person uses, I am a fan of anything that works. Some very successful traders use astrological indicators. Mercury went retrograde on 10/4. My really bad streak of trading started 10/6 Monday, the first trading day after that. Coincidence? Probably, but I would have done much better sitting out most of the dance during this retrograde time period. The next retrograde period is January 21, 2015 to February 15, 2015.

I have already made a record number of trades for one month in calendar October. For the most part, the more I trades I made, the deeper the hole got. Thankfully, I tend to be a timid trader as opposed to a a super aggressive, all in, all out, double and double again, kind of options trader. A bold trader with a month full of bad trades can lose their entire account.

I personally know two traders that went completely belly up and no longer trade at all. Both thought they could trade for a living. Both were very smart guys, but the stock market is full of smart people. I know a third person that borrowed money from mom to meet a margin call, lost that, and had to eat bag lunches for years to pay mom back. In the options market, it is often one smart person betting against another smart person. The dumb ones tend to lose their lunch money in a short time period, then stop playing.

I attended the local monthly CANSLIM meetup. Attendance and energy level are steady. ILMN was mentioned at the meeting. This continues to be one of the most hated bull markets, with little excitement, little enthusiasm. One minor anecdote is that a couple of young relatives have opened up stock market accounts. Used to be that V-shaped chart formations were rare, but during the recent years, V-shaped charts are relatively common.

Enough of the stories and astrology for now, here are this week's retrograde trades in a booming up week for stocks:

Fri Sell VRX Nov 110 puts @128.3. Rebalance short strangles by selling another layer of puts on Valeant Pharma.

Sell TLT Nov 115 puts @120.2. Hedge my long Dec 110 puts in the Treasury ETF by selling these Novembers. Another poor intra-day move, as I sell the puts near the worst time of the day.

Thu The market is up big and my account down, so it is a crappy day for me. The culprit is 3M Corp which gaps higher on news. I cover short calls near the highs of the day, only to see it close near the strike price of the short calls. I continue to scramble to add longs as the market rallies, but my timing leaves much to be desired.

Cover short MMM Nov 145 calls @147.2 for a huge loss, about 600% basis the premium collected.

Sell UNP Nov 100 puts @111.2 Union Pacific Rail
Sell HON Nov 87.5 puts @93.4 Honeywell
Sell YHOO Nov 39 puts @42.8 Yahoo!
Sell AMGN Nov 133 puts @147.5 Amgen

Sell GLD Nov 134 calls @118.2. I also rebalance my net long position in gold as it declines.

Tue A rip your face off rally today in stocks. I scramble to add long delta as I caught flat footed after expiration. So much for taking a break from trading after the losing streak with seven fills today and three more that didn't fill. I take a new long position in ILMN Illumina on earnings. The rest are rebalancing on short strangles. I wrote down the prices at the time of the fills, but lost that scrap of paper before I could type them here.

Sell MMM Nov 128 puts 3M Corp
Sell FDX Nov 145 puts Federal Express
Sell DIS Nov 77.5 puts Disney

Sell IWM Nov 98 puts Russell 2000 ETF
Sell ASH Nov 95 puts Ashland
Sell NKE Nov 82.5 puts Nike
 
Sell ILMN Nov 155 puts. New long position Illumina, mentioned at the local CANSLIM meetup group.

Mon Sell HON Nov 80 puts @89.7. Rebalance short strangles on Honeywell.
Position Summary:
long ILMN UNH UNP
net long APC BRKB GLD IWM TLT
net short AMGN ASH DIS HON JWN NKE YHOO
net neutral FDX SPY UNH

Saturday, October 18, 2014

27-13 for October Grade D

Strictly on profit/loss, the October option cycle would grade out at F. This was my worst month in some time with 27 winners and 13 losers. Most of my trades are 80% to 90% probability going in, so that ratio is poor. Some of my losers were whoppers, 1000% basis the premium collected. Put buyers made ten times their money, if they bought when I sold and covered when I covered. 

Overall, I give back about 60% of my modest profits for 2014. The reason for the D grade, is the curve of a difficult market. More than a few strangle sellers and put sellers suffered huge losses this month. Some may experienced margin calls.

As for me, I got a bit too enamored of the bullish calendar cycle, ignoring so many of the the other warning signs. I did take out some insurance against an October smash. Back on July 31, I bought an October put spread on SPY, buying SPY Oct 180 puts and selling the Oct 171 puts. Unfortunately, my timing and my strikes prices on this insurance purchase were a bit off and it expired worthless.

The good news is that I live to trade another day. Hopefully a bit wiser from the experience. I didn't panic. I kept moving. Unfortunately, a lot of my moves were wrong. Many traders trade less, trade smaller, or take a break after a losing streak. Sounds good to me, so I may be more selective the next couple of weeks. The emotional reponse might be revenge trading to try and make up for recent losses. Most traders end up digging a deeper hole with revenge trading. 

Weekly: Wild Whipsaw Washout

Wednesday's huge gap opening lower took out many of my mental stops. I closed many short puts for huge percentage losses, near the lows. For the week, I am down signficantly, though still up for the year. What's done is done. 

One reason I have this blog is to help me learn by writing about my trading. The main thing I might have done differently is wait a bit long on Wednesday before covering. I covered most of the puts in the first 15 minutes of trading (which turned out to be near the lows for many of those stocks). Waiting another 15 minutes to 30 minutes would have been so much better. Had I held on until expiration, I believe all of those losers came back above the strike price by expiration Friday. Big gaps like that rarely keep moving in the direction of the gap. I acted like a trading robot, closing so many positions in a short time period, as they touched on my mental stops.

The fantasy hindsight replay has me closing out all my long puts and doubling down on short puts at the bottom on Wednesday, but readers know that I am not such a bold trader. I tend to be a relatively slow moving options trader with a dislike for fast markets. I am not nimble, don't have good instincts. don't have a good gut. On the plus side, I am good with numbers, with odds, and am patient. My style of trading works towards my strengths. Many are bored by what I do. I always tell novices to find a style a method that works for you. There are a thousand ways to make money in the markets. Find one or two that work for you, that fit your personality.

The lowlights of the trading week include closing out short puts on AMGN BRKB HON FDX IBB MRK MSFT WFC, all for losses. I also sold some calls on Thursday, which wasn't the best move either. One bright spot was my GLD bull calendar, up about 60%. My TLT bear calendar is down about 75%. I initiate new longs in UNH UNP. It is a jelly side down kind of week (a piece of bread with jelly spread on one side seems to land jelly side down more often than not). Since the Alibaba IPO day market peak, about 60% of my modest profits for the year have been given back. I brush myself off and move ahead. Hopefully, I am a bit wiser from this recent turbulence. I'll post a monthly summary with more thoughts within a day. Here are this week's trades:

Thu Another big gap down this morning on the stock market, but near unchanged by the close. I don't do that much better with intra-day timing as I sell some calls to hedge some of my short puts.

Sell GLD Nov 128 calls @119.0. I was long a call calendar, and am selling the Novembers before the Oct 123 calls expire (hopefully worthless). I may get a bit more premium by selling now instead of on Monday after expiration.

Sell YHOO Nov 44 puts @37.6. Rebalance short strangles on Yahoo!, I am short the Nov 36 puts, Nov 48 calls, and some October options which hopefully expire safe.

Hedge short puts on Nordstroms, Nike and Disney by selling calls.
Sell JWM Nov 77.5 calls @67.4
Sell NKE Nov 95 calls @84.8
Sell DIS Nov 92.5 calls @81.3.

New long positions in United Healthcare and Union Pacific Railroad.

Sell UNH Nov 75 puts @85.4.
Sell UNP Nov puts @104.0.

Wed Disaster morning with SPY gapping down 3 full points. I cover any short puts that move into the money, closing six positions in the first 15 minutes for huge losses. It is not a time to be cute, not for someone like me, who isn't in front of the computer all day, and tends to be a slow moving position trader. I see it as time to survive. As the fills come in, SPY is bouncing off the lows, so I could have gotten out at better prices on most. 
 
C'est la vie. Obviously, I would have been better off holding on for 20 minutes or so. Some might criticize and say that I panicked. No, I followed my rules. Fast markets are not my friend. My account is still up a tiny bit for the year, with about 85% of the year's peak profits now gone (it was at 50% on Sunday!).
 
Cover MSFT Oct 43 puts @42.5. Microsoft gaps lower after Intel earnings. Loss is 800% basis the premium collected.
Cover MRK Oct 55 puts @54.8 220% loss
Cover AMGN Oct 130 puts @129.7 350% loss
Cover FDX Oct 150 puts @149.7 500% loss
Cover IBB Oct 250 puts @249.9 600% loss
Cover BRKB Oct 135 puts @134.9 240% loss

By the end of trading, it looks like Wednesday morning was a wash out low. Most of the positions I covered were up sharply off their low by the end of trading. Some were actually positive for the day (shakes head).

Sell VRX Nov 140 calls @114.8 .50. One final trade for wash out Wednesday, I hedge my short puts on Valeant Pharma by selling calls.

Tue Cover WFC Oct 50 puts @49.3. Another day, another loser. Wells Fargo bank earnings disappoint and the stock breaks support at 50, which is also my strike price. Loss is about 700% basis the premium collected. Despite this morning's stock market relief rally, I am following the mechanical rule of closing positions if they break the strike price. As I type this, WFC drifts higher, so I could have gotten out at a better price by waiting five minutes. It is an illusion that I can call highs and lows, and when stocks will turn on a dime.

Sell AMGN Nov 155 calls @133.7. I rebalance a net long position in Amgen by selling calls.

Sell HON Nov 95 calls @86.2. I hedge short puts by selling calls on Honeywell.

Sell MMM Nov 145 calls @135.2. Hedge short puts on 3M Corp by selling calls.

Mon Sell AMGN Nov 115 puts @136.6. I open a November position in Amgen. SPY has broken support at 190.5 so we will see what happens next.

Sell JWN Nov 60 puts @69.2. I open a November position in Nordstroms, as the stock market continues lower. AMGN another 2 points lower so I continue to do poorly on the short term timing.

Cover short HON Oct 87.5 puts @87.4. I take the loss on Honeywell at it crosses the strike price of my short puts. The loss is about 700% basis the premium collected. HON chart is a waterfall decline. Wow.

Sell BRKB Nov 150 calls @137.8. I rebalance my net long position in Berkshire Hathaway by selling calls.
Sell ASH Nov 110 calls @98.8. I hedge my short puts in Ashland by selling calls. Chart resistance at the 110 level.

Position summary:
long UNH UNP
net long APC ASH BRKB GLD IWM MMM SPY
net neutral AMGN DIS FDX JWN NKE VRX
short TLT / net short HON
closed or expired: IBB MRK MSFT SLB TTM WFC