Saturday, June 06, 2015

Weekly: Stupid is as Stupid Does

The line is from the movie Forrest Gump. It felt like that kind of week for me. I lost money in AMBA, SKX and a few others. The dollar losses were relatively small, but the frustration level, nay, the stupidity level, felt high. 

Perhaps some days with minimal stock market involvement might be a good prescription for what ails me. I've been burned before selling very short term calls but did it again this week, for the first whopper loss of 2015 at 1500% on some AMBA weekly calls. Ouch. The second mistake was buying some puts because of someone else'e opinion instead of my own analysis. Double ouch.

Losing money is inevitable for retail traders. However, in tennis there are unforced errors, same in the markets. A trader that does stupid things, lowers their odds of profit. 

The critical inner voice tells me that I got too cute, too confident, too greedy for small premiums, too enamoured of rebalancing to near delta neutral.

The past is outer environment. I have no control over the outer environment. I spent the mandatory eight minutes scolding myself (the losses weren't that big), time to move on, perhaps with a bit of a lighter stock market activity schedule for a few days.

Fri Sell JPM Jul 62.5 p @67.2 Rebalance my JP Morgan Chase
Buy AMBA Jun 90 p @98.5 Reverse and go net short AMBA. I attended a IBD Canslim meetup last night. When the AMBA was reviewed, one of the older, wiser traders remarked that it looked like a blow off top. So I am paying 90 cents per unit on that chance. I sold two layers of June puts below 90 so have a complicated position. A few minutes later AMBA edges higher and the price of the Jun 90s falls, so more bad intra-day timing as I am down 25% on this latest leg in a matter of minutes, and down about 60% by end of day. Crunch!

Cover (buy to close) AMBA JunW1 101 c @102.4 Kaboom! I got too cute on Ambarella and am covering this leg for a 1500% loss, basis the premium collected. All in two days too. This is on top of the wreckage of buying puts just above this. Wow, just wow. Forrest Gump comes to mind: Stupid is as Stupid does. Just stupid all the way around. Thankfully the dollar amounts are small, even if the percentages are eye popping.

Buy SKX shares @109.4 I add another half unit of Sketchers, brings my total to one unit. I am short two units of Jun 110 calls so it is another sticky wicket.

Thu Sell AMBA Jun 86.5 p @99.8 Rebalance my position in Ambarella as it moves up. AMBA broke 100 earlier today, so my sold 101 calls are being threatened.

Sell BRKB Jul 150 c @141.6 Hedge sold puts by selling calls in Berkshire Hathaway. BRKB has been underperforming the broad stock market this year.

Sell SKX Jul 120 c @107.2 Rebalance a complicated position in Sketchers closer to neutral. SKX has become a mess. I have sold multiple layers of puts and calls and now also am long half a position in shares. Yesterdays breakout to new highs is looking like a fake out.

Roll MCK puts down @234.8: Cover (buy-to-close) MCK Jul 260 c / Sell (to-open) MCK Jul 250 c for credit. McKesson moving lower so I adjust my position.

Cover (buy to close) 2x SPY Jun 180 p @209.8. I close these legs of the sold put backratio to free up buying power, as the needle moves to the yellow zone.

Sell HON Jul 110 c @103.5. Rebalance a complicated position in Honeywell. I am short unbalanced strangles, long half a position in shares.

Wed Sell AMBA JunW1 90 p @95.9 New long position in Ambarella. AMBA higher after earnings. These are weeklies with only two days. If they get threatened, I will roll down and out. A couple of hours later, I sell a layer of JunW1 101 calls with AMBA @95.0 to hedge the sold puts. AMBA has had a wild ride today with a high above 99. Dropping below the opening price weakens the bullish case. A bit later, I add a third layer selling Jun 82.5 puts with AMBA @95.9. So far I sold JunW1 90/101 strangles and the week three 82.5 puts.

Buy SKX shares half a position @108.4. I am short two units of SKX Jun 110 calls so am adjusting my delta in Sketchers as it makes new highs.

Sell JBLU Jul 19 p @20.7 30 Rebalance my position in Jet Blue. I sold the Jun 19/21 strangles and it is getting uncomfortable. 
Tue Sell MRK Jul 62.5 c @59.9 Rebalance my position in Merck as it drops after the pop. It is hard to get any traction in this market. MRK is becoming another messy one.

Sell PVH Jun 105 p @112.7 New long position in Philip Van Heusen. PVH gapping up on earnings, breakout base is 105.

Mon Sell SKX Jul 95 p @106.4 Rebalance my position in Sketchers. I now have six layers of sold options. Yes, it has been a bit of a mess.

Sell MRK Jul 57.5 p @61.5 Ditto for Merck. Rebalance.

Sell DIS Jul 120 c @110.8 Hedge sold puts by selling calls. Disney up modestly after a positive article in Barrons. A few minutes later I sell another layer of puts, DIS Jun 105 p @111.0.

Sell EL Jul 92.5 c @86.8 Hedge sold puts by selling calls, turning the Estee Lauder

Sell IWM Jun 117.5 p @124.6 Rebalance my position in the Russell 2000 etf.

Sell TIF Jun 87.5 p @94.1 New long position in Tiffany. TIF gapped higher on earnings a few days back. 87.5 is near the break out level.

Sell DATA Jul 95 p @113.0 I open a July position in Tableau Software.

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