Friday, August 28, 2015

Weekly: Wild and Crazy, guys

A crazy week with a 1000 point drop in the DJIA on Monday, with the market up about 1% for the week. Wow. My mind brings back a memory of Steve Martin's bit about two wild and crazy guys. It was a market filled with landmines as well as pots of gold. For the most part I avoided extremes. I tend to stay in the middle, avoiding big bets. I was up for the week.

There were reports that a lot of new accounts were opened on Robinhood (a free trading app) where a lot of young, small investors congregate. I take this as an intermediate term negative. There was another article about how markets typically react after such wild swings. The conclusion was that new highs are likely 8 months to 15 months in the future.

I sold a lot of shorter term premium, thinking that the market will go back down at some point. How far down? That is the big question. There was a huge rebound in oil. There were wacky fills on Monday, on etfs such as SPLV, VIG. However, I didn't know what was going on and had some open positions to manage. When in doubt, stay out. Like I said, I usually take the middle and avoid big bets, or bold moves.

Here are the trades from a wild week. p = puts, c = calls, lot of weeklies in this report so note the W-suffix (eg: SepW1 for September week one expiration), sell means sell-to-open

Fri Sell NFLX SepW1 95 p @117.8 Rebalance in Netflix

Sell BRKB Sep 125 p @135.3 New long position in Berkshire Hathaway. Recent low around 125.

Sell TSLA Sep 300 c @248.4 Hedge sold puts by selling calls. Tesla nearing trendline resistance on the chart at 252. 287 is the recent high, and 300 is round number resistance.

Sell SPY SepW2 208.5 c @198.5 Late in the day I rebalance in the S&P500 etf.

Thu I rebalance on the opening rally, which then fades. Morning:

Sell SPY SepW1 185 p @197.5 Rebalance in the S&P 500 etf on a follow thru rally day.

Sell SPY SepW2 185 p @197.6
Sell NFLX Sep 95 p @115.3 Rebalance in NFLX

Sell IBB Sep 315 p @347.0 Rebalance in the biotech etf
Sell HON Sep 105 c @99.3 Rebalance in Honeywell

As the day continues, I do more rebalancing in SPY, NFLX, SKX, new long position in TSLA:
Sell SPY AugW4 192 p @197.2
Sell NFLX AugW4 108 p @117.4

Sell SPY AugW4 194 p @198.7
Sell SPY SepW1 192 p @198.7

Sell SKX SepW1 130 p @143.4
Sell SPY SepW2 192 p @199.2

Sell TSLA Sep 205 p @244.0 210 New long. Recent trading low was around 215.

Wed Sell SPY Sep W1 175 p @191.1 Rebalance in the S&P 500 etf.

After yesterday's late selloff I am thinking a rally into the close is likely. So during the last hour, more rebalancing trades:

Sell SPY AugW4 182 p @192.0 a minute later another layer as SPY rallies
Sell SPY Sep Sep W1 182 p @193.0

Sell NFLX Sep 85 p @108.5 Rebalance in Netflix
Sell IBB Sep 275 p @339.5 Rebalance in the biotech etf.

Tue Sell SPY SepW1 180 p @194.2 Rebalance in the S&P500 etf. A few minutes later: Sell SPY SepW1 205 c @193.6 My mediocre to poor intra-day timing continues. I add a third SPY trade a bit later: Sell SPY AugW4 200 c @192.5 At this point in the day, the rally is looking sad.

Sell IBB Sep 290 p @335 Rebalance in the biotech etf.
Sell NFLX Sep 122.14 c @103.9 Rebalance in Netflix

Mon Mini-crash at the open with the DJIA down over 1000 points in early trade. As the day continues, I am all over the place and take more losses.

Cover (buy to close) TGT Sep 77.5 p @76.2 Target moves past my stop loss level. I close this leg for a -1500% loss. Target options did not even open for trading until about 20 minutes after the open.

Sell half a position in HON @94.69 for about a -12% loss.

Sell SPY Sep 208 c @191.6 I sell some way otm calls and puts on the S&P 500 etf, legging in. Chart resistance at 205 and 207. The other leg: Sell SPY Sep 155 p @191.5 is at the 9% probability line.

Cover (buy to close) JWN Sep 72.5 p @72.5 Nordstroms hits my stop level and I get out with an order at the mid price, about a 600% loss, basis the premium collected.

Sell SKX Sep 155 c @129.8 Rebalance my position in Sketchers.

Later on Monday, I am all over the place and flounder badly:

Sell (to close) SPY Sep 190 p @195.0 SPY crosses 194 resistance to the upside and I bail out of these puts for a 70% profit. 90 minutes later: Buy (to close) SPY Oct 193 p @193.5 for a 400% loss

Sell (to close) IBB Sep 330 p @339.0 The biotech etf goes green for the day and I close this leg for a 40% profit. I am still short Sep 300 puts. As IBB declines, I feel remorse and reestablish: Buy IBB Oct 325 p @334.0 Like I said, I am all over the place and taking more losses in this difficult market.

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