Friday, January 09, 2015
Weekly: New Year starts with a bang
2015 starts off with a rollercoaster ride, ending with the week on a down note. My trading account is up a tad, so I managed the ups and downs better than I have in the recent past. Some highlights include many rebalancing trades, new position in XOM (near neutral), new longs GDX, WFC, many rebalancing trades, and opening some February positions on existing longs. Here are the trades (p =puts, c = calls, all are third week of the month expiration):
Thu Sell WHR Feb 155 p @194.5. Rebalance back to net long on Whirlpool and Amgen.
Sell AMGN Feb 135 p @161.2.
With the wide option spreads, I am entering the orders at the mid or a penny or two below the mid as day limit orders. Sometimes I get filled right away, sometimes it takes a while and the stock to come back. Sometimes the order sits and expires. It isn't easy to trade these wide spreads, though on actively traded stocks fills are more likely.
Sell SPY Jan 196 p @204.9. Rebalance SPY back to net neutral. Those Mar 218 calls I sold are deep in the red. I selling puts to hedge. The strike is below both sets of recent lows.
Sell FDX Feb 150 p @174.1. Add to longs in Federal Express
Sell XOM Jan 86 p @91.7. Rebalance short strangles in Exxon Mobil by selling calls. The strike is below the recent low of 86.1.
Wed Sell XOM Feb 77.5 p @90.7. Rebalance short strangles on Exxon Mobil.
Sell VRX Feb 105 p @144.1. Add to longs in Valeant Pharma, one of my best bull stocks from 2014.
Sell MMM Feb 135 p @159.9. Add to longs in 3M Corp. MMM is at the 50 day moving average line on the chart.
Sell JWN Feb 70 p @79.3. Rebalance my position in Nordstroms back to net long. 70 is a support level.
Tue Cover AMGN Jan 148 p @155.2. I close these short puts near breakeven to take some risk off the table.
Sell UNP Feb 95 p @113.9. Add to longs in Union Pacific railroad.
Sell GDX Mar 16 p @20.3. Add to longs in gold miners.
Sell SPY Mar 218 c @199.5. Rebalance in a minor way my net long position in SPY by selling calls.
Sell XOM Feb 97.5 c @89.4. Hedge short puts by sellings calls. The thought in my mind "well, that didn't work, buying the dip in oil," so I move closer to a neutral position in Exxon Mobil.
Sell ASH Feb 95 p @117.2. Add to longs in Ashland Corp. ASH was one of my best bull stocks during 2014.
Mon New long position in the gold mining etf. 16.45 is the 52-week-low, so I pick the strike below that.
Sell GDX Feb 16 p @19.1
Sell SPY Backratio @203.3: Buy SPY Mar 184 p
Sell 2x SPY Mar 179 p for a credit
Again, I like to sell SPY backratios after a tick up in volatility. These are delta positive, theta positive, for a net credit. There is the possibility of an explosive profit on a decline to the lower strike. A decline below 174 and losses start to spiral. In an up or unchanged market, I get to keep the small credit.
Sell DIS Feb 80 p @92.5. I add to longs in Disney. 80 is several support levels away.
Sell WFC Feb 45 p @52.3. New long position in Wells Fargo
Sell IWM Feb 122 c @117.0. Rebalance short strangles on the Russell 2000 etf. I reduce my net long position by selling calls. The minor high is 121.41.
Some trades from the prior week:
Fri 1/2/15 Sell BRKB Feb 135 p @151.1
Turns out that the early morning rally is a head fake. The double pump fake has the market moving lower, then closing near unchanged.
Wed 12/31/14 I rebalance short strangles back to neutral on the Russell 2000 etf.
Sell IWM Jan 113 p @120.6
Tue 12/30/14 Sell BBY Jan 34.5 p
Mon 12/29/14 Sell JWN Jan 75 p
net long AMGN BBY FDX GDX HON JWN SPY
net neutral APC NKE WHR XOM YHOO
long ASH BRKB DIS ILMN KMX MMM MSFT UNH UNP VRX WFC
new positions: GDX, WFC long, XOM net neutral