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.

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