Saturday, May 16, 2015

Weekly: no fanfare

Without much fanfare SPY makes a new closing high. Gold moved higher. However, the premium on GLD options seems too small to be selling puts, and the chart isn't decisive enough to be buying premium. Bonds had a huge relief rally on Friday. Option premiums and spreads on TLT give a poor risk/reward.

As for my week, I did some damage control in ASH HON LOCO, new positions in ACT DATA DE YUM. I made money, but again felt like I left a lot on the table. 
Here are the trades: (p = puts, c = calls, all are third week expiration, sell means sell-to-open).

Fri Sell LOCO Jun 29 c @24.9 El Pollo Loco down on earnings. I rebalance my short strangles. The sold puts are at 23. JWN also out with earnings and stock is holding.

Sell DE Jun 80 p @88.8 New long position in John Deere. DE down on analyst comments.

Cover (buy to close) STJ May 75 c @74.9 St. Jude Medical runs up to 75.1 in late trade. I cover my sold calls six minutes before the close, rather than risk another spike higher at the close.

Thu Cover (buy to close) HON Jun 105 c @106.3 I roll my calls up, buying back the 105s selling the 110s:
Sell HON Jun 110 c 50. The 105s are closed for a 300% loss. Despite the poor timing on so many of my Honeywell trades, I am up a tad for the year on HON.

Sell DATA strangles: Jun 100 p / Jun 130 c @112.8
New position in Tableau software, short strangles, skewing bullish. Again, a short strangle is a bet on a trading range.

Sell DIS Jun 100 p @109.8 Add to longs in Disney. I am selling way out of the money puts. Some like to think of this as placing a limit order at the strike price.

Wed Cover (buy to close) HON May 105 c @105.0. I take about a 25% loss as Honeywell crosses the strike price of these calls to the upside. I shake my head, as I follow my mechanical stop loss levels. HON has been a difficult stock for me for calendar 2015.

Sell HON Jun 95 p @105.0. A few minutes later I sell these Honeywell puts. I currently have half a position in shares, short Jun 105 calls, now short Jun 95 puts.
HON closes at 104.4. My trades this year with HON remind me of the Peanuts cartoon, with Lucy Van Pelt pulling away the football when Charlie Brown runs to kick it. Poor Charlie Brown never learns, never gets to kick the ball. Thankfully, I around break even for HON. As I sometimes write, if my "bad" trades are break even, it is going to be a good year.

Tue Sell ASH Jun 135 c @125.6 Ashland lower after a big investor says they sold their stake.

Sell ACT Jun 335 c @296.7. Actavis lower after yesterday's earnings pop. Another pop-and-flop. Grrr. I am short strangles now.

Mon Sell ACT Jun 260 p @302.7. New long position in Actavis. ACT gapping higher on earnings. I selling puts way out of the money because so many of these IBD (Investors Business Daily) kind of stocks have popped then dropped.

Sell YUM Jun 80 p @90.1. New long position in Yum Brands. Earnings were about three weeks ago. Chart base is 80. Not much premium on these way out of the money puts.

Sell MRK Jun 57.5 p @60.5. Add to longs in Merck. The earnings gap was around 58.

Position Summary:
net neutral ACT ASH IWM SPY

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