Saturday, April 18, 2015

Weekly: boat limps into harbor

It felt like a very long week, mostly due to the action on Friday. The down move has my boat limping into expiration harbor after the storm. I survived okay, but it wasn't smooth sailing. 

A few highlights include a new position in JPM, some damage control in XOM, adding long to FB ahead of earnings. I am up a bit for the week. TSLA was a lot of the gain, as all five April legs sold on TSLA came in profitable. UNH earnings came in good, HON not so good. 

I'll post the monthly round up in another day or so. Here are this week's trades (p = puts, c = calls, all are third week expiration unless noted):

Fri Sell JPM May 65 c @63.2. I hedge the Jun 60 puts I sold, by selling May 65 calls on JP Morgan Chase. With a new Star Wars movie trailer in the news, I paraphrase Hans Solo, "I have a bad feeling about this," with SPY down hard on news from China.

Sell HON May 105 c 101.7. Honeywell down after earnings news. The layers of April options I sold look to be safe, but I have a half position in shares that I am hedging by selling calls. I bought the shares when I was short 105 Mar calls and HON went to 106. It hasn't exactly worked out as planned. Despite some poor timing, I am still up a bit for 2015 tallying up all the trades for HON.

Sell UNH May 130 c @119.4. United Healthcare was up on earnings the other day. I sold some May 110 puts, and am hedging those by selling calls.

Sell FB AprW4 90 c @81.2. I reduce delta on a complicated position in Facebook by selling these earning's week calls (earnings out next week, these are week four options).

Cover (buy to close) TSLA Apr 190 p @203.7. Cover Tesla puts for a few bucks to free up buying power.

Sell JWN May 82.5 c @77.6. Nordstroms not acting well, lagging the retail etf, so I am hedging sold puts by selling calls.

Sell FXI May 58 c @50.0. Hedge sold puts by selling calls on the China ETF.

Later in the day, I cover some puts, just in case there is a knife down at the close. I am in no mood to "dance with the devil" on expiration day.

Cover (buy to close) COST Apr 140 p @143.6]
Cover (buy to close) FB Apr 79.5 p @80.6
Cover (buy to close) TSLA Apr 197.5 p @204.5. 

The market rallies a bit into the close, so my precautionary moves cost me a buck, two or three on some of these contracts. Rule #1 is live to trade another day, Ninety minutes ago there was little way to tell if the closing action would be wild or mild.

Thu Cover (buy to close) XOM May 82.5 p @87.6. I got head faked yesterday, closing out short May 90 calls on strength. I decide to cut my risk and bail from this leg of Exxon Mobil for break even. I don't have a good feel for XOM at the moment. When in doubt get out.

Sell UNH May 110 p @121.4. United Healthcare up on earnings. My short strangles for April look to be safe. I rolled the dice holding through earnings and rolled a 7. All the April legs look relatively safe with only one day left and earnings news out.

Wed Cover (buy to close) XOM May 90 c @88.4. Exxon Mobil up again today. I cover this leg for about a 300% loss, basis the premium collected. I am doing this so that the loss from this leg doesn't exceed the gain from selling other legs, so the overall position comes out okay. Some might say this is convoluted logic. My thinking is that if my bad trades tend to be near break even, it will end up as a good year.

Tue Sell PANW May 165 c @144.2. I hedge my short May 125 puts by selling calls on Palo Alto Networks. Earnings are after May expiration, and I don't see it breaking out of its base before then.

Sell XOM May 82.5 p @87.0. I rebalance short strangles on Exxon Mobil as it rallies. I am short the May 90 calls, so it is getting a bit uncomfortable.

Cover (buy to close) HD Apr 105 p @114.0. Cover for two bucks for buying power.

Sell JPM Jun 60 p @63.1. New long position in JP Morgan Chase bank. JPM up on earning. I like the chart pattern. I am selling puts further out in time and closer in price than I often do, because the setup looks very good. I will see if this works or not. When timid traders get a bit more aggressive, sometimes they get burned.

Mon Sell TSLA Apr 197.5 p @212.1 Rebalance my position in Tesla Motors with yet another layers of puts as TSLA creeps higher. My short calls are a 222.5.

Sell FB AprW4 74 p @83.4. I add more delta as Facebook moves higher. These expire after earnings, so implied volatility is elevated. There is a thick band of support on the chart at 77 and lower. I have a complicated position in FB, net long. 

Position summary:
net neutral FXI PANW SPY 

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