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

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