Saturday, October 31, 2015

Weekly: burned in IBB

A rally in biotech stopped out some position in IBB for huge losses. IBB rallied over my 330 strike price on sold calls and that is the stop level.

Overall, a tiny loss for the week. Other highlights include new long positions in EXPE on earnings, and HOT on takeover rumors. The weekly options I sold on TSLA came in, despite some turbulence in the price action.

Here are the trades (c = calls, p = puts, sell means sell-to-open, weekly options denoted by W suffix, so NovW2 would be November week two, all others are third week expiration) The number at the end is price of option, usually the premium collected from selling the option.
Mon 10/26/15 Sell IBB OctW4 282.5 p 44 rebalance
Sell SPY NovW1 199p 25 rebalance

Tue Sell MCD Nov 120 c 25 hedge
Sell JBLU Nov 27 c 15 hedge
Sell IBB OctW5 300 p 35 rebalance

Wed Sell IBB NovW1 290 p 62 rebalance
Sell IWM Nov 107 p 23 add
Sell HOT Nov 65 p 25 chart

Cover (buy-to-close) IBB OctW5 330 c 390 huge losses as biotech rallies about a 400% loss
Sell SPY NovW2 199 p 36 rebalance

Thu Sell TSO Nov 92.5 p 25 rebalance

Fri Sell IBB Nov 365 c 52 reestablish
Sell EXPE Nov 120 p 30 new long on earnings

Saturday, October 24, 2015

Weekly: Boom goes the dynamite

Stock market explodes to the upside on Thursday and Friday. Unfortunately, I have a painful down week. SKX Sketchers craters -30% on their earnings report and I take about a 1300% loss on some sold puts. It is always painful to lose money, but it seems like it hurts more when the overall market is up. Another big loss was on some sold AAPL calls. A third gut wrencher was selling strangles on TSLA Telsa and then having Consumer Reports pan the Model S car and the stock gets hit.

The philosophical perspective is that I've had a decent run for a little bit and my luck was due to revert to the mean and balance out to the bad side. If a trader sells enough premium some big moves are going to against you.
I initiate new long positions in BA Boeing, BRKB Berkshire, and MCD McDonalds.

Here are the trades (c = calls, p = puts, sell means sell-to-open, weeklies denoted by W suffix, e.g. NovW1 is November week one, all others are third week expiration).

Mon 10/19/15
More layers on the biotech etf:
Sell IBB OctW4 290 p 45
Sell IBB OctW4 335 c 30

Sell BRKB Nov 125 p 54 new long, strike is below recent lows

Tue Sell AAPL OctW5 92 p 20 rebalance
Sell IBB OctW5 330 c 95 rebalance

Sell TSLA strangles, way otm. A short time after I get in, Consumer Reports sends TSLA stock down, dropping the Model S from its best car short list.
Sell TSLA OctW5 195 p 35
Sell TSLA OctW5 250 c 24

Wed Sell IBB OctW4 320 c 35

Sell IBB OctW5 330 c 70
Sell TSLA OctW5 230 c 65

Sell Disney strangles:
Sell DIS Nov 95 p 34
Sell DIS Nov 124 c 20

Thu Sell MCD Nov 97.5 p 37 new long
Sell BA Nov 120 p 20 new long position

Sell SPY NovW1 196 p 36
Sell MCD Nov 100 p 42 add to longs

Fri Cover AAPL OctW4 116 c 234 1500% loss
Cover SKX Nov 35 p 500 about a 1300% loss

Saturday, October 17, 2015

Back in the saddle 44 - 12 for October, grade B-

I count 44 winners, 12 losers for October. The good news is that my trading account has recovered all the losses and then some from the summer swoon. Yippee! The bad news is that my overall positioning was a bit too cautious. I thought the market would be lower. I covered some sold calls for losses in DIS Disney, NKE Nike, SKX Sketchers and others.

Back to the good side, I played IBB the biotech etf rather well, with mostly winners, and a lot of them. IBB is not all that liquid, so I sold options a bit further out of the money than usual to lessen the chance to have to cover.

Going forward? I think the correction isn't over. New lows might still be out there. The parallel is to the 2010 flash crash correction, which took four months to bottom. If 2015 keeps similar time, late November 2015 would be the bottom.

If this is the start of a bear market, all bets are off. I am open to that possibility. However, am not willing to place heavy bets on the bear becoming dominant. It is just a possibility.

Weekly: upward bias

Market tilts up. I cover some calls for losses. I sell strangles in AAPL, CMG and IBB. I make money, though when covering for losses, it feels like I am leaving significant money on the table. The bigger picture is the overall profit level. As always, I tend to be a cautious, hedging trader. Low risk, low reward, and hopefully steady profits are what I am mostly looking for, with the occasional big swing for the fences.

Here are the trades (p = puts, c = calls, weeklies have the W suffix, NovW1 for first week in November).
Mon Sell IBB Oct 327.5 c 35 Rebalance in the biotech etf

Tue Another day, another whipsaw. This time it is Disney making a new high then fading.

Cover DIS Oct 107 c 77 about a 500% loss on this leg
Sell IBB strangles:
Sell IBB OctW4 330 c 99 / Sell IBB OctW4 270 p 77

Sell SKX Nov 105 p 130

Sell AAPL strangles:
Sell AAPL Nov 90 p 54 / Sell AAPL Nov 130 c 19

Wed Sell TSO Nov 120 c 25 rebalance in Tesoro

Sell AAPL OctW4 116 c 18 rebalance in Apple

Sell CMG strangles:
Sell CMG Nov 545 p 200 / Nov 885 c 100

Thu Sell NKE Nov 115 p 41 rebalance in Nike

Sell SPY OctW5 189p 29 rebalance

Sell ALK Nov 65 p add to longs

Fri Rally in Nike and Sketchers cost me some money

Cover NKE Oct 129 c 49 about a -15% loss

Sell V Nov 67.5 p 38 add
Sell TSO Nov 85 p 34 rebalance

Cover SKX Oct 45 c 20 (after 3-for-1 split) about breakeven

Saturday, October 10, 2015

Weekly: air pocket in SKX

Sketchers SKX suffered a dramatic drop on no news, and I exit my long positions for big losses. Other highlights are a bevy of winners in IBB the biotech etf, and new long positions in ALK JBLU TSO (Alaska Air, Jet Blue, Tesoro Energy). I also took some small losses in GoPro GPRO Honeywell HON and a big whopper covering some IWM calls I sold. 
Overall, my account was up nicely, as the market rallied all week. It is nice to be wrong and yet still make money. It is a by product of the hedging, low risk, low reward style. Some ask why I trade that way, and the answer is weeks like this, when I am mostly wrong on market direction (I was too cautious), but still made decent money. Those that are better at directional trading do that.

Here are the trades (c = calls, p = puts, weeklies have the W suffix (OctW5 for October week 5), all others are third week expiration. The number is the price paid per contract (eg: 25 = $25 per contract)

Mon A WTF? rally. I am positioned okay because IBB doesn't participate in the rally.

Sell V Oct 67.5 p 22
Sell IBB Oct 285 p 156

Sell IWM Oct 107.5 p 35
Sell IBB OctW2 335 c 45

Sell JBLU Nov 22 p 25
Sell IWM Nov 100 p 60
Sell SPY OctW4 186.5 52

Tue Sell IBB Oct 327.5 c 76
Sell TSLA Oct 270 c 26

Wed Sketchers dives lower on no news. Again WTF? I get out near the lows :(
Cover SKX Oct 118 p 338 for about a 250% loss
Cover SKX Oct 120 p 380 for about a 300% loss

Cover V Oct 72.5 c 122 for about a 200% loss
Sell DIS Oct 107 c 15 hedge sold puts

Thu Sell ALK Oct 70 p 25 New long position in Alaska Air
Sell SKX Oct 115 p 64 I go back into Sketchers
Sell TSLA Oct 250 c 26 Rebalance in Tesla Motors

Cover GPRO Oct 24 p 27 Close this leg on GoPro for a 20% loss.

Fri Cover IWM Oct 115 c 158 for about an 800% loss in the Russell 2000

Cover HON Oct 105 c 29 about a 10% loss in Honeywell

Sell DIS Nov 92.5 p 70 rebalance in Disney
Sell SPY OctW5 187 p 46 rebalance in S&P500

Sell TSLA Oct 190 p 28 add to a net long position in Tesla
Sell TSO Nov 85 p 68 new long in Tesoro

Saturday, October 03, 2015

Weekly: Batman market Wham Pow

What comes to mind is the old Batman TV shows featuring Adam West. In the fight scenes, there are big captions: WHAM POW. Here is a short youtube link Batman tells Penguin "surrender that giant pie" link

In particular, Friday, saw over a 5 point swing from low to high on SPY. It looked to me like a massive short squeeze. Highlights of this week include my biggest long premium winner of the year in terms of dollar amounts. 

The IBB Oct 325 puts were sold to close for a 60% profit. The biotech etf continues to have wild swings. I did okay overall, but felt like I left a lot of money on the table. The realistic view is that "half a loaf" is what my cautious strategies tend to get. Can't expect big winners, if I am usually hedging. I sold a strangle on TSLA.

Here are the trades. I am changing the format to start with Monday end with Friday. Not a big deal but it may read a little better. (c = calls, p = puts, sell means sell-to-open, weeklies indicated by w suffix, all other options are third week expiration, numbers are prices in dollars per contract)

Mon Sell NKE Oct 129 c 49
Cover SPY OctW1 185 p 81 About a 25% profit
Sell SKX Oct 150 c 75

Cover BWLD Oct 175 p 65 About a 27% profit
Cover PANW Oct 155 p 85 About a 16% profit

Tue Sell IBB OctW2 270 p 280
Sell IBB OctW1 270 p 85
Sell IWM Oct 115 c 21

Sell GPRO Oct 38 c 19
Cover IWM Oct 107 p 222 About a 200% loss

Sell IBB Oct 342.5 c 57
Sell IBB OctW2 320 c 103

Cover SPY OctW2 185 p 265 About a 350% loss
Sell V Oct 72.5 c 26

Wed Sell-to-close IBB Oct 325 p @2462 about a 60% gain, biggest long premium winner of the year.

Sell SPY Oct 177 p 56
Sell IBB Oct 250 p 110

Sell SKX Oct 118 p 100
Sell NKE Oct 112 p 54

Sell IBB OctW1 320 c 56
Sell IBB OctW1 315 c 55
Sell IBB Oct 335 c 80

Thu Sell IBB Oct 240 p 63

Fri Sell IBB OctW2 280 p 153
Sell IBB Oct 270 p 170

Sell SPY Oct 181 p 42
Cover (buy-to-close) IBB 315 c 40 about a 20% gain

Sell TSLA Oct 205 p 60
Sell TSLA Oct 285 c 27

Sell IBB OctW2 285 p 90
Sell NKE Nov 110 p 72
Sell SPY Oct 183.5 p 47