Saturday, September 12, 2015

Weekly: Whippy market continues

Overall market is up about 2% for the week, after being down about 3% the week before. I took some more losses in my problem tickers HON and NFLX. I opened new long positions in BWLD CLR and sold strangles on AAPL ahead of their event. 

Another story from the coffee shop: one guy is waiting for the Fed news before making his move to buy mutual funds. I told him, that I thought the Fed day would be a non-event, and that surprised him. My thinking is that no matter the news, a lot of people have a lot of energy on the event. Most have prepared for the most likely outcomes, so a big move due to the widely anticipated news is unlikely. 
Here are the trades for the week (p = puts, c = calls, sell means sell-to-open, all options are third week expiration unless otherwise noted with a W suffix, eg: OctW1 would be first week of October)

Fri Sell CLR Oct 21 p @28.1 New long position in Continental Resources. CLR down with the group with a Goldman Sachs report citing a $20 per barrel target for crude oil. Goldman sometimes will be a few days within a turning point. In this case, oil has been trending lower for a while and this may mean we are close to a bottom.

Wed This morning, the rally getting uncomfortable for me because I sold calls on the dip.

Cover (buy to close) HON Sep 100 c @100.8 Cover this leg for a 110% loss.

Sell SPY SepW4 185 p @198.8 Rebalance in the S&P 500 etf. I am short some 200 strike calls so it is getting warm in here. Right after this, I sell another layer:
Sell SPY OctW1 185 p @198.8 I am still way net short SPY which for now is a market timing mistake.

Sell BWLD Oct 175 p @201 New long position in Buffalo Wild Wings

Sell NFLX SepW2 90 p @100.8 Rebalance in Netflix

Sell SPY SepW4 204.5 c @196.8 Rebalance in the S&P 500 etf. Hours later:
Sell SPY OctW1 204 c @195.0 Rebalance in the S&P 500 etf. Sheesh, another wild day.

The wide swings tip my "boat." It again feels like I am buying the highs and sold the lows, though some of that is mechanical stop losses kicking in. I continue to take losses. Honeywell and Netflix have been particularly frustrating. My mental stop on Netflix got taken out yesterday, and today it is rallying. This morning, I got stopped out on Honeywell and it is fading. A minor positive so far, Apple's big press day is turning out to be a non-event for the stock, which is the perfect scenario for me, the strangle seller.

I've been telling people I meet in person about watching golf on TV. Golfer Bubba Watson used to get upset and lose his cool after missing a shot, or a putt. He is working on remaining calm after average mistakes. This is a lesson for me too, divorcing myself from the outcome. Humorously, "if I knew better, I'd do better." I have some rules in place, and the best thing to do is follow those rules. Sure there are times to change what a person is doing, both in golf and in the market, but not based on emotion, not based on one missed shot, or one losing trade. 
Tue I add long delta to rebalance on the gap open up:
Sell IWM Sep 108 p @114.6 Russell 2000 etf
Sell SPY Sep 183 p @196.5 S&P 500 etf

Sell NFLX SepW2 110 c @96.0 Rebalance in Netflix. Tape action is disappointing on a big rally day.

Cover (buy to close) NFLX Sep 95 p @94.0 I close this position for about a 300% loss as Netflix crosses below the strike price. A few minutes later I roll down with:
Sell NFLX Sep 75 p @94.3

Sell IBB 310 p @346.0 Rebalance in the biotech etf. Later in the day a second rebalancing trade:
Sell IBB 312.5 p @349.3 
Sell AAPL strangles @111.2: AAPL Sep 98 p / Sell AAPL 120 c

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