Weekly: Hamster Wheel

In their monthly update, Schwab described the current stock market as a Hamster Wheel. It felt that way for me this week. Friday's big rally was like a bit of hamster kibble for my efforts. There was some good, some bad. Like many traders, the bad tends to stick in my mind. 

I made money, but felt like I left a lot on the table. I got chewed up and spit out by GPRO, and lost on one leg of JPM on the Friday rally. My defensive moves from last week were premature, overly cautious. Highlights include new longs in EL JBLU. 

Here are the trades from the Hamster Wheel week: (p = puts, c = calls, sell means sell-to-open, all are third week of expiration unless noted: Disney is a May week 5)

Fri Sell EL Jun 82.5 p @88.6. Add to longs in Estee Lauder. Chart base is around 83.

Cover (buy to close) JPM May 65 c @65.1. I close this leg on JP Morgan Chase bank for about a 75% loss as JPM crosses the strike price to the upside. By the time I type this up JPM drifts lower to 64.7, so not the best timing on the exit.

Sell IWM Jun 111 p @123.1 Rebalance my position in the Russell 2000 etf as it rallies.

Cover (buy to close) GPRO May 54 c @50.6. Close this leg on GoPro for about a 180% loss. I am waving the white flag. I mangled this trade. I was chewed up and spit out by the tape action, losing on both sold puts and calls.

Sell DIS MayW5 103 p @110.0. I sell some week-five puts on Disney. Tape action hasn't been great after good earnings, but it is a name worth buying on a pull back.

Sell JBLU Jun 19 p @21.8. New long position in JetBlue. Not much premium, because I am giving it some room.

Thu Sell SKX Jun 80 p @95.2. Add to longs in Sketchers.

Sell ASH Jun 115 p @129.6. Add to longs in Ashland.

Wed Sell EL Jun 80 p @86.3 New long position in Estee-Lauder. EL broke out from a chart base after a great earnings report. Anecdotally, these mid level names seem to be holding a bit better than the most popular stocks.

Sell HON Jun 105 c @101.1. Hedge my half position in Honeywell stock as it declines. HON has been a "problem ticker" most of 2015 for me.

Sell FXI Jun 56 c @49.9. Rebalance my complicated position in the China Large Cap etf.

Cover (buy to close) GPRO May 46.5 p @47.9. I take a 350% loss, basis premium collected, on this leg for GoPro. GPRO did bounce off the minor support at the chart gap around 47. However, the overall stock market is bleeding red with SPY - 2.0, so I am not in a mood to trade technical bounces so am taking my loss while it is still manageable in dollar terms. Low of the day was 46.50, same as the strike price. I am still short May 54 calls and May 58 calls.

Tue Sell IWM Jun 130 c @121.5. I hedge yesterday's put sale on the Russell 2000 by selling calls. My bullish idea has been met with lower prices.

Sell GPRO May 54 c @48.1 Rebalance my position in GoPro.

Sell SPY put backratios: 

Buy SPY Jul 190 p, Sell 2x SPY Jul 185 p @209.3

These backratios are for credit, net long delta, with the potential for a large profit on a decline to exactly 185 at July expiration. They protect against a 10% decline, though loses cascade on a drop below SPY 180 (about a 15% drop from here). If the market is up or flat, I keep the small credit.

Mon Sell IWM Jun 109 p @122.7. I often sell these Russell 2000 puts near the 10% probability line around the start of the month. A good, easy way to edge back in, after last week's beating. Marketwatch lead story this morning is about the stock market bubble popping, a good sign for bulls.

Sell JPM May 62 p @64.1 Rebalance my position in JP Morgan Chase bank. I was already short May 65 calls and June 60 puts on JPM.

Position Summary:

short CAT FB GPRO HAR UNH

net neutral AMBA FXI KMX PANW STJ

net long DIS IWM SPY

long APC ASH BRKB EL JBLU MRK SKX XOM

short means I sold calls

net neutral: short strangles or similar, delta near 0

net long: short strangles, with a bias to long
long typical means I sold puts