Saturday, March 21, 2015

Weekly:Yellin and Yelling

This week was dominated by Fed day and the huge rallies in stocks, bonds, gold that came after. I scrambled to cover short calls. I lost patience with GLD and got out before the Fed news. I got whipsawed on some moves, and glad I covered on some others. My overall market position might be described as short strangles with a bullish bias, so I made money, but not as much as bullish traders did. It was a tough week to be a bear.
Most of the week was spent rebalancing, covering layers of calls on rallying stocks, and covering winning positions early to free up the buying power. I spent most of the week near the redline of buying power, so maybe some over trading. I may look to cut back on the number of trades. The broker always makes money, but activity doesn't always equate to profits. My monthly update will come before Monday.

Here are this week's trades (p = puts, c = calls, all 3rd week expiration unless noted):

Fri Cover (buy to close) HON Mar 105 c x2 @105.2. I close these with about 80 minutes left to trade, rather than "dance with the devil" at expiration. I have two layers, one closes with a decent profit, a breakeven profit on the other. So rather than risk the psychological damage of letting these winners turn into losers, I get out. The other side is that there are only 80 more minutes to trade, and maybe I wouldn't have to cover at all, if Honeywell drifts down. Readers know that I do not see myself as a nimble trader, so playing the last hour at expiration doesn't appeal to me.

Roll (buy to close) HON Apr 105 c @105.4. A few minutes later I roll my April leg up. I close the April 105 calls for about a 300% loss, basis the premium collected, and sell HON Apr 110 calls. Last month's expiration marked a short term high in HON. While that might happen again, I am thinking that this expiration may be a head fake and HON may continue higher. I still have half a position in shares and some short puts. Despite some poor timing on my rebalancing moves, I am still up overall for 2015 on HON.

Sell MNST Apr 130 p @138.1. Rebalance short strangles on Monster Beverage.

Sell UNH Apr 110 p @120.1. Rebalance short strangles on United Healthcare. Looks like it might be a pin situation for UNH at the 120 strike.

Thu I close the last of my Apple options to free up buying power.
Cover (buy to close) AAPL Mar 115 p @129.0
Cover (buy to close) AAPL Mar 138 c

A modest profit overall on Apple, with six trades. There was one 70% loser on the March 125 puts the rest 90%+ winners. I close early to free up the buying power. I used to think of Apple as one of my nemesis stocks, a stock to be avoided because of prior losing trades. I have dispelled that curse.

Wed (Fed day) Sell FDX Apr 185 c @172.2. Federal Express moves lower on earnings. I rebalance short strangles.

Sell MNST Apr 145 c @134.5. Rebalance short strangles on Monster Beverage. MNST broke out on earnings a while ago. Since then it has drifted lower. Resistance at the break out high of 143.9.

Sell APC Apr 70 p @81.4. I open an April position in Anadarko Petroleum. Despite crude making new lows, APC is above its recent lows. This divergence is encouraging.

Sell XOM Apr 77.5 p @85.3. Rebalance short strangles on Exxon Mobil. Similar deals. I was washed out of some Mar 82.5 puts about 8 trading days ago. I am edging back in at a lower strike and near net neutral.

Sell IWM Apr 114 p @124.0. My token response to the rally after the Fed announcement is to rebalance some strangles on the Russell 2000 etf.

Cover (buy to close) HON Apr 105 c @103.5. Honeywell moving higher after Fed news. I was short two layers of April 105 calls and cover one of them for a 55% loss, basis the premium collected. HON has been a "devil-dog" stock for me for the past month or so. I've been mostly selling the lows, buying the highs. My over all HON position is now back to net long.

Cover (buy to close) XOM Apr 90 c @85.7. I close this leg at break even after commissions. That's the main reason for getting out, it is crossing back over the break even line.
Sell DIS Apr 105 p @108.3. Rebalance short strangles on Disney.

Tue I close some SPY and AAPL legs for a buck per contract to free up some buying power.
Cover (buy to close) SPY Mar 179 p x2 @207.3
Cover (buy to close) SPY Mar 218 c @207.3
Cover (buy to close) AAPL Mar 105 p @126.5
Cover (buy to close) AAPL Mar 140 c 2x @126.5

Sell JWN Apr 72.5 p @80.1. I open an April position in Nordstroms.

Mon Cover (buy to close) UNH MarW4 118 c @117.3. Ouch. United Healthcare moving higher this morning and I cover this leg of short calls for about a 110% loss (basis the premium collected).

Sell UNH Apr 110 p @117.8. Two minutes later, I sell some put as UNH at the bid, as it continues to push higher. I am short strangles, but it is a complicated layered position.
Cover (buy to close) UNH Mar 120 c x2 @118.2. It's a runaway train to the upside, and I am getting crushed on calls that I sold. I get out of a double layer of calls, both at modest losses.

Sell HON Apr 97.5 p @102.0. Honeywell is another problem position, and I rebalance a messy position by selling another layer of puts.

Sell PANW Apr 125 p @141.9. Rebalance short strangles on Palo Alto Networks.

Sell DIS AprW2 102 p @107.4. Rebalance short strangles on Disney.

Sell AMBA Apr 55 p @69.6. Ambarella has held up well and continues to advance. I add to a net long position by selling another layer of puts. 50 day moving average is around 58 and I see that as significant support.

Sell FDX Apr 160 p @176.9. Rebalance short strangles on Federal Express.

Cover (buy to close) MMM Mar 145 p @164. I close my position in 3M Corp for a 95% gain, to free up buying power. The flurry of activity today, has me at the red line.

Position summary:
net long UNH XOM
net short COST HD HON
closed AAPL MMM

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