Saturday, February 27, 2016

Weekly: upward bias

The stock market edged higher then faded on Friday. For the week, it was an upward bias. We will see if the big moves return, or if a slower moving market returns. I kept rebalancing back towards delta neutral in SPY. That meant a lot of buying high and selling low, but I had a positive week overall. 

I did burn through a lot of dry powder, but I can always close positions and roll the traditional way, if the need arises. I continue my adventures in CMG and TSLA. These two popular stocks have been good to me recently.

Here are the trades (c = calls, p = puts, weeklies denoted by W suffix, W1 is week1, sell means sell-to-open, cover means buy-to-close).

Mon Rally rolls on, I rebalance by selling more puts
Sell TSLA Mar 130 p 81
Sell CMG Mar 395 p 110

Sell SPY Mar 180 p 75
Sell DIS Mar 90 p 59

Sell UNH Mar 108 p 53
Sell SPY MarW2 180 p 35

Sell FB Mar 95 p 52
Sell SPY MarW1 185 p 30

Tue Sell TSLA Mar 135 p 92
Sell CMG Mar 430 p 205

Wed Sell SPY MarW2 199 c 33
Sell TSLA Mar 215 c 68
Sell SPY MarW1 197 c 25

Thu Sell SPY MarW2 182 p 42

Fri Sell SPY MarW2 186 p 43
Sell SPY Mar 186 p 96
Sell TSLA Mar 150 p 96

Saturday, February 20, 2016

Monthly: Treading water 67-19, grade C-

I count 67 winners, 19 losers for the February option cycle, grade is C-. It was a month punctuated by some huge percentage losers. Boeing BA, Facebook FB, Under Armor UA were the main culprits. I did make some money in Chipotle CMG and Telsa and was mostly profitable on the index trades IWM and SPY. Overall, I eek out a tiny profit for the month. I am down close to -5% for calendar 2016.

Year to date from best to worst:
GLD +18% gold
TLT +8% treasuries
SPY -5.8% U.S. large cap
EEM -6% emerging markets
VEA -8% developed markets
IWM -10.8% U.S. small cap

The wide swings in the U.S. market were not good for naked option selling, at least not the options I was selling. I got hurt on both sides on some wide swings. The vexing thing is that had I held my initial position(s), often times I would have ended up just fine. Instead, I often blundered by edging back to delta neutral, only to get whacked on both ends of the sold strangle. These things happen, and are certainly frustrating when they do happen.

As always predictions are mostly for entertainment. Money is made by risk management and execution. If I had to guess I would guess, that lower lows are out there. The bull case is that this is a correction and the correction is over. The bear case is that this is a bear market and there will be another 3 to 15 months of prices moving lower.

Weekly: relief rally

This week I add some long delta as the market moves up. The rally lifts some boat. My "boat" feels like it has been battered. More details in the monthly update.
Here are the trades: (c = calls, p = puts, sell means sell-to-open, cover means buy-to-close)

Tue Sell SPY MarW1 175 p 51 rebalance on the rally
Cover UA Feb 80 c 200 Another leg closed for a huge loss on Under Armor (700% loss).

Sell DIS Mar 80 p 31 Rebalance

Wed Sell DIS Mar 85 p 47 rebalance again
Sell SPY MarW1 178 p 42
Sell UNH Mar 105 p 67

Sell HON Mar 95 p 48
Sell IWM MarW1 92.5 p 29

Sell SPY MarW1 180 p 47
Cover CMG Feb 380 p 05 98% profit

Saturday, February 13, 2016

Weekly: The hits keep on coming

It was another bad trading week for me. Some mental stop loss levels were triggered and I got washed out of some legs on: Facebook FB, Under Armor UA, Boeing BA. The move in BA was the most frightening and the biggest percentage loser (2700% loss) I have had in a while. BA came under investigation for accounting practices and the stock dove lower

Bottom line: I've been trading badly. I am about 7% for calendar 2016. This is my worst few weeks in a while. The market holiday for President's Day comes at a good time. What do I tell folks in a slump: trade smaller, take on less risk, perhaps take a break.

Here are the trades (c = calls, p = puts, weeklies denoted by a W, the rest are third week expiration, sell means sell-to-open, cover means buy-to-close):

Mon Bang Zoom mental stops are triggered and I take more losses on the gap open lower
Cover VLO Feb 55 p 242 about a 300% loss
Cover FB Feb 100 p 355 about a 600% loss
Sell-to-close FB Feb 101 c 340 about a 100% gain

Cover DIS Feb 90 p 320 about a 500% loss

Sell UA shares @70.79 about a 14% loss

Cover SPY Mar 178 p 442 about a 140% loss

Sell half position in FB shares (all gone now) 98.57 about a 9% loss

Looks like the last four trades are near the lows of the move. Not good. I feel like I've been ground up and spit out by a meat grinder market. 
Tue Sell FB Feb 89 p 38 rebalance
Sell FB Feb 87 p 24
Got flushed out of most of my FB longs, on my mental stop levels, so cautiously add positive delta.

Wed Sell UNH Mar 95 p 58
Sell HON Mar 90 p 51

Sell DIS Mar 100 c 31
Sell TLSA FebW2 95 p 54

Thu Sell TLSA Mar 90 p 50
Sell TSLA Mar 230 c 35

Telsa moving higher after their report. Looks like short covering. I've been trading so badly, I go way, way out to sell premium.

Sell SPY Mar 198 c 52

Boeing under investigation by Feds. omg. I get out at the ask, taking two huge hits.
Cover BA Feb 105 p 473 about a 900% loss
Cover BA Feb 110 p 787 about a 2700% loss
By the end of the day BA recovers to 108+. I covered when it was below 104. Sh*t.

Sell UNH Mar 125 c 37
Sell FB Mar 120 c 39
Fri Sell FB FebW4 90 p 31

Cover CMG Feb 550 c 15 90% gain
Cover CMG Feb 325 p 05 95% gain

Sell CMG Mar 350 p 193
Sell CMG Mar 600 c 90

Sell SPY FebW4 170 p 30
Sell MCD Mar 105 p 58

Saturday, February 06, 2016

Weekly: More pain, no gains

It was Ground Hog day this week, and the January sell off blues came back. There were a number of huge landmines such as Linked In (LNKD) and Tableau Software (DATA). I got caught in a couple of difficult trades, Facebook FB and Under Armor UA. It is looking more and more like a bear market. If so, the time frame projects out to July 2016 before the skies clear, perhaps even July 2017 if it is a nasty bear market.

It is a time to regroup, and perhaps even become more cautious. Bear market rallies tend to be violent and quick, so it is not a time to get complacent on the short side.
Here are the trades (c = calls, p = put, sell means sell-to-open, cover means buy-to-close, all option are third week expiration).

Tue Roll FB puts up:
Cover FB Feb 97 p 11
Sell FB Feb 106 p 40
Cover FB Feb 85 p 03

Wed Cover UA Feb 80 p 280 about a 300% loss
I got clobbered on both ends on Under Armor, and still have open positions in the red. Yikes.

Sell BA Feb 110 p 33
Sell FB Feb 123 c 29
Sell V Mar 62.5 p 27

Thu Rebalancing moves:
Sell NFLX Feb 107 c 29
Sell MCD Feb 127 c 17
Sell UA Mar 92.5 c 40
Sell FB Mar 125 c 81

Cover AAPL Feb 120 c 02 (buying power moves)
Cover BA Feb 145 c 01
Cover CMG Feb 300 p 05

Fri Cover NFLX Feb 80 p 156 about a 140% loss
I am still short several layers of Netflix calls, and the profit from those is about the loss from this leg. So am getting out while the overall is near break even.

Cover FB Feb 106 p 266 about a 800% loss
Sell FB Feb 118 c 28
I was way too long Facebook on this sharp pullback. Hate to do it, but covered the 106 puts even though I think that is a good support level. 117 was the recent high so may be resistance. FUBAR on what coulda, shoulda been a good winner.

Cover UA Feb 75 p 280 stopped out for a 600% loss
Cover FB Feb 123 c 05 80% profit
Sell FB Feb 114 c 48 roll
Sell V Mar 80 c 16 hedge 

Cover SPY Feb 180 p 82 40% profit
Cover DIS Feb 115 c 02 95% profit
Cover VLO Mar 57.5 p 357 about a 600% loss
Sell half position in FB shares 103.58 about a 4% loss