Saturday, June 13, 2015

Weekly: Blue on JetBlue

A quiet week for me. Took a loss on JBLU did some damage control on JPM MRK SKX. Made money this week. Here are the trades:
(p = puts, c = calls, sell means sell-to-open, third week of expiration unless noted)

Fri Cover (buy to close) MRK Jun 58 p @58.4 I cover this leg for about a 25% loss on Merck. As MRK declines my delta is getting uncomfortably large. I have multiple layers of sold puts. Selling another layers of calls was another possibility, but premium is low. So I cover one layer of sold puts to reduce my delta and take the loss on this leg. Later in the day I sell another layer of MRK calls @58.0 Jul 60 calls.

Sell SKX Jul 100 p @111.2 Rebalance my complicated position in Sketchers as it continues to rally. A few minutes later I add another half position in shares @111.50. What a wild ride it has been. I now have 1.5 units in shares but am also short two units of SKX Jun 110 calls. It is a complicated near delta neutral position.

Cover (buy to close) IWM Jun 111 p @125.9 Free up some buying power by covering this layer on the Russell 2000 for a 93% profit.

Cover (buy to close) DIS Jun 100 p @109.8. Ditto on Disney. Cover to free up buying power.

Wed Sell IWM Jul 115 p @126.2 Rebalance my position in the Russell 2000 etf.

Sell JPM JulW1 64.5 p @68.3 Rebalance in JP Morgan Chase, using some weekly options.

Tue Cover (buy to close) JBLU Jun 19 p @18.5 JetBlue continues lower. I cover this leg for a 600% loss. I was hoping 19 would hold, but today's early action took me out.

Cover (buy to close) JBLU Jul 19 p @18.6 110 This leg is about a 500% loss. These kind of losses will happen if there is a trending move. The gap through my mental stop level of 19 and the thin liquidity contribute to the difficulty in getting out. As always, even though the percentages are horrendous, the dollar amounts tend to be small. I still have the sold Jun 21 calls but that tiny premium helps only a little when the losses on the sold puts are so big. JBLU bouncing a bit after I get my fills. That can and will sometimes happen when a trader uses stops. The stop gets taken out and the stock reverses. It is painful, but a trader either uses stops or doesn't, there is no magic way to know.

Position Summary:
net long EL HON SKX YUM
* long typically means I sold puts
net long sold puts and calls skewing bullish
net neutral same thing, but near delta neutral
short means I sold calls

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