I
added longs in APC Anadarko Petroleum and WDC Western Digital. APC is
an old friend. I also opened several May positions and most are in
the red. Early in the week, it seemed like there was rotation out of
bonds into stocks and that reversed on Friday. Continuing down this
week are some of the big name winners of this bull market. Google,
Amazon, Netflix, some big biotech names, all peaked two or three
weeks ago.
Fri
A frantic Friday, with a higher open, then a knife down in some
stocks.
Sell
APC May 87.5 puts @102.1. Add to longs as Anadarko climbs even more.
Sell
ASH May 85 puts @98.7. Open a May position in Ashland.
Sell
IWM May 123 calls @114.3. Rebalance my net long position in the
Russell 2000 ETF.
Thu
Sell APC May 85 puts @99.2. Anadarko Petroleum up big on news of a
settlement. 85 is the breakout point. I traded APC extensively in
2013, but have stayed away from it this year because of the law suit.
Wed
Sell UAL Apr 43 puts @47.8. I rebalance as United Continental moves
higher. Another point higher and I will cover my short Apr 50 calls
for a loss.
Tue
A busy day, eight trades. Let's hope I am not the April Fool.
Sell
UAL May 38 puts @46.3. Sell May puts to rebalance my position in
United Continental. I am short April strangles.
Buy
to cover GILD Apr 80 calls @73.2. I cover these short calls while
there is still a small profit, in part to avoid the possibility of
losing big on both ends of the short strangle. It is galling enough
to have covered short puts near the lows. It would be worse to get
crunched on both sides if there is a monster rally.
Sell
DIS May 70 puts @81.0. Add to longs in Disney.
Sell
UNH May 72.5 puts @81.7. Open a May position in United Healthcare.
Sell
MRK May 50 puts @56.1. Open a May position in Merck.
Sell
KORS May 80 puts @94.6. Open a May position in Michael Kors.
Sell
WDC Apr 82.5 puts @93.0. New long position, Western Digital making
new highs. 82.5 is the bottom of the trading range.
Sell
IWM May 101 puts @117.1. I add a fourth layer of May short puts for
the Russell 2000 to rebalance back to net long.
Most
of these eight Tuesday trades are more worm trades. (Fishing analogy of digging for worms
instead of fishing.) While April tends to be a good month, May is
often not.
Mon
Sell IWM Apr 109 puts @.30 @116.5 rebalance. I sell puts to rebalance
my position in the Russell 2000 ETF.
Sell
GILD Apr 62.5 puts @.30 @70.7 rebalance. Same for Gilead Sciences. In
hindsight, Friday might have been the bottom, about where I closed my
Apr 70 puts. These things happen. Either a person uses stops and
takes losses or they don't. The alternatives are to "go down
with the ship" or perhaps even double down. Selling way out of
the money naked options, means the odds of losing are low, but there
is the potential for huge losses. Again, a popular analogy is picking
up nickels in front of a moving. The profits are tiny, with the risk
of getting flattened if something unusual happens. It is still
painful to lose.
Position
summary:
long
APC ASH BA DAL DIS HON HPQ MSFT SLB UNH WDC VRX
net
long AMGN GILD IWM SPY UAL
No comments:
Post a Comment