Saturday, February 18, 2017

Monthly: Half a loaf and TINA, 59-4 Grade B

The bull market roars ahead. SPY is up 5.2% for 2017. My trading account is up 3.7%, so I am lagging. IWM is up 3.2% so I am in the game. Overall, it feels like I left money on the table. I usually lag if there is a big upside move, so it is not unexpected.

Here are some etfs year to date, best to worst:

SLV +12.9% silver
EEM +9.7% Emerging market stocks

GLD +7.4% gold
SPY +5.2% U.S. large cap (SP500)

IWM +3.2 U.S. small cap (Russell 2000)
TLT +1.0 U.S. 20 year treasury

My trading account +3.7%. This remains the most hated bull market that I can remember. A lot of people are still nervous, many have sold or are still on the sidelines. This is not the sentiment at major market tops. A correction of 5% can happen at any time, but a bigger decline remains extremely unlikely.

Why is the market up? A lot of people shorted the market. There is also TINA, there is no alternative. With bonds underperforming, CDs still paying relatively low rates. People with money have to put it some where. A bit has been flowing in precious metals with gold, and silver among the best performers for calendar 2017.

Friday, February 17, 2017

Weekly: Short Covering

As the rally accelerates I scramble and cover a couple of short calls on COST and DIA. It was a frustrating week, even though I ended up slightly in the green. My initial position in NVDA was spot on, but I exited my long leg on earnings day. 

The feeling is like a baseball hitter what he thinks is a home run and trots to first base, only to see the ball careen off the wall, and be stuck on first base. As is almost the case, I am lagging behind during the sharp rally.

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

Mon Cover (buy-to-close) BRKB Feb 165 c 108 for a 27% profit on this leg

Roll BRKB Feb 160 c to Mar 165 c -255 debit
Cover (buy-to-close) BRKB Feb 160 c 555 -125% loss on this leg

Sell BRKB Mar 165 c 300
Sell SPY Mar3rd 224 p 26

Sell DIA Mar 197 p 73
Sell SPY Apr 212 p 70

Wed Cover DIA Feb 206 c 56 for a 200% loss
Cover SPY Feb 205 p 01 for 98% gain

Sell COST Mar 165 p 75
Sell BRKB Jun 150 p 107

Thu Cover COST Feb 175 c 97 for a 260% loss on this leg
Cover SPY Feb 216 p 01 for a 96% gain

Sell NTES Mar 250 p 76 earnings

Friday, February 10, 2017

Weekly: More new highs

Market continues to bull ahead. These posts are sounding familiar. I am positioned a bit too conservatively. I add some long delta as the rally rolls on. Here are the trades (sell means sell-to-open, p = puts, c = calls, number at end of line is price per contract)

Wed Sell NVDA backratio for nothing:
Buy NVDA Feb 108 p 204
Sell 2x NVDA Feb 103 p 104 each

Sell PNRA strangle: Sell PNRA Mar 215 p 89
Sell PNRA Mar 255 c 32

Thu Bull is leaving without me, so I add long delta:
Sell IWM Mar 124 p 39
Sell SPY Mar 215 p 45
Sell DIA Mar 190 p 47

Fri Cover NVDA Feb 108 p 32 for a 80% loss on this leg
I am thinking the Feb 103 puts are safe
Sell BRKB Jun 150 p 152

Saturday, February 04, 2017

Weekly: back to the highs

Stock market is back to the highs. That minor dip might all we get. February averages maybe -1.6% and that was about the size of the intraday dip. I remain cautiously bullish, a bit under invested given my bullish mood.

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

Mon Sell IBM Feb 185 c 12
Sell IWM Mar 115 p 25

Sell BA Mar 180 c 28
Sell AVGO Feb 220 c 30

Sell DIA strangle: 
Sell DIA Mar 180 p 40
Sell DIA Mar 208 c 18

Tue Sell GD Feb 170 p 47
Sell CAT Feb 86 p 14
Sell AAPL Feb 110 p 30

Thu Sell COST Mar 150 p 43
Sell WYNN Mar 115 c 27
Sell MSFT Mar 67.5 c 14

Fri Sell V Mar 77.5 p

Sunday, January 29, 2017

Weekly: Plowing ahead

The bull market plows ahead. Happy Year of the Rooster for those that follow that lunar calendar. The lunar calendar is where my screen name comes from (year of the Tiger).

Anyway, Dow 20,000 came in with modest celebration. I went to a local IBD meetup. The market is in good relatively shape. So I added more longs. With option expiration, I came into the week with a lot of buying power.

Here are the trades, p = puts, c = calls, sell means sell-to-open, the number at the end is the price per contract.

Mon Sell QCOM strangle: 
Sell QCOM Feb 50 p 51
Sell QCOM Feb 63 c 23

Tue Sell BRKB Mar 155 p 138
Sell BABA Feb 92 p 25

Sell NFLX Feb 125 p 33

Sell XLE strangle: 
Sell XLE Mar 68 p 33
Sell XLE Mar 80 c 20

Sell UNH Mar 140 p 59
Sell IWM Feb 125 p 22

Sell SPY Feb 216 p 30

Thu Sell IBM Feb 165 p 37

Sell RCL Feb 85 p 25
Sell RCL Mar 82.5 p 52

Sell BRKB Feb 160 p 67
Sell BRKB Mar 160 p 1.7

Sell QCOM Feb 60 c 14
Sell AVGO Feb 187.5 p 74

Fri Sell WYNN Mar 85 p 49
Sell BA Mar 150 p 60

Sell MSFT Mar 60 p 19

Saturday, January 21, 2017

So far so good, 40-1 grade A-

I count 40 winners, 1 loser for the January option cycle, for a grade of A-. This results in the small but useful gain of +1.7%. Minor negatives were some over trading in BRKB and being a bit too cautious.

Precious metals and emerging markets rebound sharply to start the year, after ending 2016 near their lows. A few etfs for 2017 year to date, best to worst:

SLV +7.1% silver
GLD +5.0% gold

EEM +4.0% emerging market stocks
SPY +1.4% S&P 500 U.S. large cap

TLT +0.7% U.S. 20 year treasuries
IWM -0.3% Russell 2000 U.S. small cap

Again, my account up 1.7%. So far so good, for three weeks. I still see a lot of online negativity and chatter about a steep stock market decline. This makes the odds of that happening exceedingly small. I am still looking at banks, defense, oil, as some secular bullish themes. The overall optimism about the economy may extend further into airlines and hotels.

Weekly: regrets?

At the end of the week, I regret some of my BRKB trades. BRKB closed at 160.22 so both side of the 160 strangle would have come in. Instead, I take a loss on one leg, and roll the other leg. There is the illusion of perfection,. that a trader can or should know future prices. As many expected the presidential inauguration did not move markets.

Here are the trades: Cover means buy-to-close, sell means sell to open, p = puts, c = call. The number at the end is the price per contract.
Tue Cover BRKB Jan 160 p 112 for a 200% loss
Sell UNH Feb 170 c 47

Thu Sell TSLA strangle: Sell TSLA JanW5 222.5 p 34
Sell TSLA JanW5 262.5 c 34

Roll BRKB: Cover BRKB Jan 160 c 55
Sell BRKB Feb 160 c 246

Fri Sell SWKS Feb 77.5 p 40
Sell MRK Feb 57.5 p 20

Saturday, January 14, 2017

Weekly: Managing a trade vs. Mangling

Most have heard of the term "managing a trade." There are any number of ways to do this, rolling, getting stopped out, doubling down. I tend to favor rebalancing back closer to delta neutral by selling more layers of options and committing more capital. Mangling is what happens when managing goes haywire. My misadventures in BRKB this week were close to the line. 
Here are the trades: p = puts, c = calls, number at the end of the line is price per contract. Cover means buy-to-close.

Mon Sell UNH 172.5 23
Mildly bearish play on Facebook earnings. The debit backratio max profit occurs if FB declines to 110 (currently 124.4) at Feb expiration. If it is up or steady, it loses. A decline below 100 also loses. I sell a layer of closer in puts to make it delta neutral for now. Earnings are out after the JanW4 puts expire.

Sell FB backratio 131 debit: Buy FB Feb 120 p 299
Sell 2x FB Feb 110 p 84

Sell FB JanW4 115 p 30
Sell FB Jan 118 p 19

Tue Sell BRKB Feb 150 p 48
Sell BRKB Feb 165 c 155

Wed Sell BRKB Feb 155 p 92

Thu Sell SPY Feb 236 c 17
Sell DIA Feb 206 c 21

Sell BRKB Mar 165 c 225
Sell BRKB Jan 157.5 p 31

Sell IWM Feb 144 c 14

Sell SPY backratio: 
Mar 199/205 Buy SPY Mar 205 p 92
Sell 2x SPY Mar 199 p 58

Fri I took the "head fake" and sold on the steep decline on Thursday. I rebalance to limit the damage.

Sell BRKB Jan 160 p 39
Sell FB Jan 120 p 25

Cover (buy-to-close) SPY Jan 211.5 p 03 for a 90% profit
Sell IWM Feb 122 p 30