Tuesday, July 30, 2013

Buy EMN (sell puts)

Buy EMN via selling Sep 67.5 puts @80.0
Eastman Chemical breaks out on earnings. Chart base is at 76, and there is more support at 70.
 
Long BRKB EMN GE GDX IWM PG
Net long APC GLD LGF SPY
Net neutral BA

Friday, July 26, 2013

Buy BRKB IWM (sell puts)

Buy BRKB via selling Sep 100 puts @116.0
Sell IWM Sep 90 puts @103.9

I open a September position in Berkshire Hathaway. Chart support at 110, 105 and then 100. The three trades from yesterday are being hit early, but time is on my side.
I also open a September position on the Russell 2000 ETF.

Long BRKB GE GDX IWM PG
Net long APC GLD LGF SPY
Net neutral BA

Thursday, July 25, 2013

Sell strangles on BA & GLD, sell SPY backratio

Sell BA strangle Sep 92.5 put Sep 120 call @107.0
Sell GLD strangle Sep 111 put Sep 145 call @128.4
Short strangles are a bet on a trading range.

Sell SPY backratio 
buy Sep 157 put sell 2x Sep 154 put @168.7
This short backratio is for a net credit, net bullish, theta positive. If the market is up or flat, I pocket a small credit. If the market declines to 154, I get a huge profit. A decline below 151 and big losses occur.
Long BRKB GE GDX IWM PG

Net long APC GLD LGF SPY
Net neutral BA

Tuesday, July 23, 2013

Buy GE (sell puts)

Buy GE via selling Sep 23 puts @24.6
General Electric broke out from a flat base on earnings. The base is at 24, and 23 is another level of support.

Long BRKB GE GDX GLD IWM PG
Net long APC LGF SPY
Net neutral BA

Friday, July 19, 2013

12-2 for July, grade C

Twelve winners, two losers for the July option cycle. One loser was Boeing, the other was part of a SPY backratio. The Boeing loss was the worst of the year, and why the grade is so low. 

Some may ask what I learned from the BA loss. It happens, sometimes you enter a trade and a few hours later there is a fire on a plane. A person could never time that if they wanted to. I closed the riskiest part of the position, and even though, BA rallied from there, it was a sound move. A person either uses stops or doesn't.

I have concentrated open positions for August, with APC BA LGF having multiple layers of short puts. Many of the other puts are now so far out of the money, the delta is near zero, meaning I get little benefit from any up moves.


My minor foray into gold is working out so far. My short puts in GDX got off to a rough start, but are now moving in my favor. I still think lower lows are possible. 

I am still shying away from bonds. It gets too hard when the Fed can pull its puppet strings or relax them at any time. Some may say that about the other markets, but with bonds, the Fed has openly discussed both sides of the trade, intervention, tapering, and perhaps eventual unwinding.

Long BRKB GDX GLD IWM PG
Net long APC LGF SPY
Net neutral BA

Friday, July 12, 2013

Crunch--Rebalance BA (sell puts)

Sell BA Jul 104 puts @108.0
Boeing seems to be moving higher based on a Jim Cramer recommendation. I am short August calls and three layers of August puts. Earnings are on July 24, which is after July option expiration. The rally in Boeing makes my position neutral.

Elsewhere, my recent put sale on GDX isn't working out so far. So far the Yahoo column call is a decent one. As always, no indicator is 100%. However, I like to be on the positive side of the odds. In the option market, it means lower payouts, a higher percentage of winners, and in my case substantial risk if there is a big move against me.

/edit to add: I closed the BA Aug 104 puts for a monster loss. Another Boeing 787 had fire problems. Ouch. This is a big loser, worst of the year. Obviously, there was no way of knowing ahead when and if another incident might happen. Sometimes it is just bad luck.

Long BRKB GLD IWM NSC PG XOP XRT
Net long APC LGF SPY
Net neutral BA 

Thursday, July 11, 2013

Buy GDX Rebalance APC LGF (sell puts)

Sell LGF Aug 28 puts @31.9
Sell APC Aug 77.5 puts @89.7

I add a third layer of August puts on Lions Gate. As the stock moves up, the short strangle becomes a net short position. There is an earnings report second week of August. Similar deal with Anadarko Petroleum. I sell puts to rebalance a short strangle, and there are earnings in August.


Elsewhere, other short calls are taking on water as the stock market moves back to record highs on SPY. I lucked into today's move on GLD, selling puts late yesterday, which are down 60% in early trade. Some snarks might bank it, and report a 60% one-day gain on that. However, the margin requirement is large, so it is closer to 1% based on the capital required to make the trade. Commissions take another significant chunk out.

/edit to add: I sell GDX Sep 20 puts @24.9
Why today? There was an article on Yahoo finance saying to sell GDX on this up day. I don't know how long the link will remain, on the article "Dump the Gold Miners."
>> the article ends with this bit:
If you've been lugging around the GDX today is your chance to hit the sell button and look for better investments. At last count there are roughly 15,000 publicly traded companies in the world. At least 14,900 of them have better prospects than the GDX.
>>

To that I can say, wow, 14900 out of 15000 will out perform GDX? When someone writes something like that, they are likely to be eating some crow.


Long BRKB GLD IWM NSC PG XOP XRT

Net long APC BA LGF SPY

Wednesday, July 10, 2013

Buy GLD (sell puts)

Buy GLD via selling Jul 114 puts @121.0
I add to my gold longs with some July puts. I was already short Aug 91 puts. The recent low was 114.6. It is choppy action today around the Fed news. The plan is to roll down and out if gold declines. If steady or up, I get to pocket the tiny premium. One issue is the large margin requirement for selling puts on GLD.

Long BRKB GLD IWM NSC PG XOP XRT
Net long APC BA LGF SPY

Tuesday, July 09, 2013

Rebalance BA (sell puts)

Sell BA Aug 90 puts @105.0
I rebalance my position in Boeing. I am encouraged by the positive tape action after the plane crash. I now am short three layers of August puts (85, 87.5, 90) and one layer of calls (115).

Long BRKB GLD IWM NSC PG XOP XRT
Net long APC BA LGF SPY

Monday, July 08, 2013

LGF strangles

Sell LGF strangles @30.9
Sell Aug 26 puts and Aug 37 calls
There is a positive article on Lions Gate Entertainment on Marketwatch today. For most of 2013, I have been cautiously bullish on LGF. With the run it has had, call buying has done better than other strategies.

Elsewhere BA Boeing is now positive after a minor dip in the morning due to news of the 777 plane crash this weekend.

Long BRKB GLD IWM NSC PG XOP XRT
Net long APC BA LGF SPY

Friday, July 05, 2013

Buy APC and PG (sell puts)

Sell APC Jul 80 puts @88.2
Sell PG Aug 70 puts @78.3

I add to longs in Anadarko Petroleum and Proctor and Gamble. More worms for the tiger (worms, meaning low risk, tiny reward option selling).

Elsewhere, gold and bonds resume the down trend. I have a tiny position in gold, and for now I am steering clear of bonds. The trend in bonds is lower. However, seasonality is positive, and sentiment is mixed. Sentiment in metals is mixed as few bulls are throwing in the towel, despite terrible tape action.

Long BRKB GLD IWM LGF NSC PG XOP XRT
Net long APC BA SPY

Monday, July 01, 2013

Buy LGF and Rebalance BA (sell puts)

Sell BA Aug 85 puts @103.8
I add to my net long position in Boeing.

Sell LGF Aug 23 puts @29.1
I open an August position in Lions Gate.

Long BRKB GLD IWM LGF NSC PG XOP XRT
Net long APC BA SPY