Friday, June 06, 2014

Weekly: Monster truck rally

The stock market moves higher. Some point to the European Central Bank, others mention comments made by hedge fund superstar David Tepper. For me, being cautiously bullish was ok, but could have been much better. Being short strangles (puts and calls) caused me some consternation, as the short call positions went deeper into the red on each rally. Other highlights for the week include a new position in Walgreens WAG, and a renewed position in United Healthcare UNH. Here's the recap for my active week:

Fri Sell IWM Jul 106 puts 115.5 and Sell IWM Aug 103 puts 115.7. I continue to rebalance my short strangles in the Russell 2000 etf selling two more batches of puts. The strong rally has caught me net short. Again, the nearest short position are the IWM June 118 calls. IWM is getting uncomfortably close to my strike price.

Sell UNH Jul 72.5 puts @79.8. A new position in United Healthcare (was in earlier in the year, but let it lapse). UNH is doing a buyback.

Sell ASH Jul 95 puts 106.3. I open a July position as Ashland makes new highs.

Thu Sell WAG Jul 65 puts @73.4. Walgreens broke out yesterday on sales news. I take a new long position on todays minor pullback.

Sell IWM Jul 104 puts @114.5. I rebalance as the stock market shoots higher. The Russell 2000 etf up huge today. Even with this trade, I am still net short on my short strangles. Closest calls are the Jun 118. I am short and will need to cover the short calls if the IWM rally train continues.

Sell HON Jul 87.5 puts @95.3. Honeywell up today. I open a July position to add more long exposure.

Sell EWG Jul 30 puts @32.3. I add to longs in a German stock etf. European Central Bank does the predicted.

Wed Sell JWN Jul 62.5 puts @67.9. I open a July position in Nordstroms, which broke out from a base around the 62.5 strike price.

Sell IWM Aug 122 calls @111.5. I sell calls to pair with yesterday's short puts to make the August position a short strangle on the Russell 2000 etf. IWM bounces after I make this move, so the entry could have been better, either yesterday or later today.

Sell IWM Jul 99 puts @112.5. Ping pong, of the bad sort for me. I add some positive delta back to my position as the Russell 2000 rallies from the dip.

Tue Sell DAL Jul 35 puts 41.0. I open a July position in Delta Airlines.
Sell DIS strangles, I leg into short Disney strangles
Sell DIS Jul 77.5 puts @84.1 / Sell DIS Jul 90 calls @83.9

Sell IWM Aug 93 puts @112.0. I open an August position in the Russell 2000 etf.

Mon As the calendar flips to June, I open July positions in Amgen, Anadarko Petroleum, Berkshire Hathaway.
Sell BRKB Jul 120 puts @127.8.
Sell APC Jul 92.5 puts @102.7.
Sell AMGN Jul 100 puts 116.0.

Sell GLD Jul 128 calls 119.7. I rebalance my short strangles in gold by selling calls. The recent decline has increased my delta. This is another mechanical trade.

Position Summary:
net long APC
net neutral AAPL GLD SPY
net short IWM

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