I see the recent market action as a "baby swan event." There are so-called black swans which are rare. Swans live for 10 to 20 years and mate after age four. So the baby swan is something that might happen every four or five years. The sharp decline in oil is that kind of event--not an every day event, but not a black swan which I see more as a once every 20 or 30 year event. Hence, my tag "baby swan," the kind of thing that might happen every five years or so.
During volatile markets I sometimes wish I were a more nimble trader, with better instincts as to directional movements. As is, I am slow moving. My directional predictions tend to be no better than coin flips. As is, this week was painful, with a lot of red ink. I close two layers of short puts on APC for huge percentage losses. I layered some SPY put backratios to hedge. I added to longs on Monday. Trades are below:
Fri Cover short APC Dec 75 p @74.3. for about a 600% loss basis the premium collected. I pay the piper his/her second installment on Anadarko, the first is below. Wow!
Wed I layer a second SPY put Backratio
Buy SPY Feb 183 p
Sell 2x SPY Feb 178 p
Tue I hedge by selling a SPY put backratio:
Buy SPY Jan 188 p
Sell 2x SPY Jan 184 p
Again, these are bullish positions but have an explosive profit with a decline to the lower strike. If there is a crash, they start to lose big time below SPY M180.
Mon I pay the piper today in APC taking a big loss coverin some short puts. I roll down to a much lower strike, and that new position is deep in the red before the day is over. Other than taking my lumps in oil, I add to longs in ILMN, DIS, rebalance WHR.
Sell ILMN Jan 155 p @190.0
Sell DIS Jan 85 p @94.0
Sell WHR Jan 165 p @188.0
Cover short APC Jan 77.5 p @77.2
roll down by selling APC Jan 60 p
long BRKB DIS HON ILMN JWN MMM MSFT NKE UNH UNP VRX
net long AMGN ASH BBY FDX IWM SPY WHR YHOO
net neutral APC GLD TLT