Saturday, March 26, 2016

Weekly: TSLA VRX

Most of my trades this week are in Tesla and Valeant. With Sequoia fund dumping 1.5 million shares of VRX, a short term bottom may be in. Tesla has a big news event on Friday April 1st, the launch of the new car. 

As I often do, I am selling naked strangles. I start way out of the money, then add layers. I'm thinking that both these stocks are going to stabilize. My mental stops are the strike price of each layer of sold options.

Happy Easter everyone.

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, number is price per contract).

Mon Sell TSLA AprW1 200 p 89
Sell BRKB May 125 p 47

Sell VRX strangles 73 gross
Sell Apr 15 p 54 / Apr 50 c 19

Tue Sell SPY strangles 54 gross
Sell Apr 191 p 33 / Apr 211 c 21
Sell VRX AprW1 19 p 20

Wed Sell VRX Apr 20 p 38
Sell TSLA AprW1 265 c 46

Thu Sell TSLA Apr 280 c 65
Sell VRX Apr 45 c 22
Sell TSLA AprW1 192.5 p 57
Sell IWM May 90 p 36

Good Friday market holiday.

Saturday, March 19, 2016

Monthly: slump continues, 56-10, grade C

I count 56 winners, 10 losers for the March option cycle. I made money this month, but lagged the big stock market rally. SPY is back to flat for calendar 2016. I am down about -2.5% in my trading account. I am not happy with my results. I lagged the rally because I sold calls. I had some big losers in SPY and TSLA. CMG had another bad week to close the cycle.

Here are the year-to-date numbers for a few etfs, from best to worst:

GLD +18.1% gold
SLV +13.9% silver
TLT +7.0% U.S. 20-year Treasuries
EEM +5.7% Emerging market stocks
SPY +0.3% S&P 500 stocks
IWM -2.7% Russell 2000 stocks

I am right near the bottom of the barrel, right with the Russell 2000 (-2.7% vs. my -2.5%). If I were stubborn or panicky, some of the big losers would have been much worse. For the most part, I got out when my mental stop levels were breached.

Some might say bad luck, some might say bad trades. Whatever the case, the losses have been contained and I live to trade another day.


Oldtimers might remember the cartoon Wacky Races, featuring Dick Dastardly and his dog Muttley. Each cartoon episode, Dick would try to cheat his way to victory, and each time his plot would fail. His tag line was, drats, foiled again. That was my trading week. The continuing rally in SPY and TSLA had me covered sold calls for losses. A drop in CMG caused some April positions to go deep into the red. So I was down a bit for the week, overall about -2.5% for the year while SPY is about flat.

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 Cover TSLA Mar 210 c 620 about a 500% loss. Crunch. Telsa gaps higher. I am still short 215 calls and 230 calls, so I am taking my lumps.

Sell HON Apr 97.5 p 32
Sell UNH Apr 110 p 39

Sell FB Apr 92.5 p 27
Sell MCD Apr 110 p 23

Cover TSLA Mar 215 c 415 about a 600% loss. Telsa holds its gains. It moved past my 215 stop level than came back a bit.

Tue Sell TSLA AprW1 255 c 101

Wed Sell MON Apr 80 p 53 rebalance

Sell CMG Apr 550 c 158 rebalance Chipotle tumbles again on news

Thu Rally rolls on and I scramble some more.
Cover SPY Mar 204 c 72 about a 10% loss.
Sell TSLA AprW1 185 p 85

Fri Sell CMG Apr 520 c 200 Chipotle continues lower.
Cover TSLA Mar 230 c 133 about a 300% loss.

Saturday, March 12, 2016

Weekly: staying humble

Another up week for the stock market has me frustrated and disappointed. I did make money, but lagged the indexes. It is humbling. As many years I have in the stock market, I try to stay humble, try to stay in learning mode, try to always think about risk (vs. how much I am going ot make).

Are we back to bull mode? For the bull market to be officially back, we need to see new highs. For SPY that would be 214 or so. Highlights and low lights are a new long position in ULTA, more short covering, some bad news for CMG.

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 Sell TSLA Apr 140 p 140 rebalance
Sell DIS Apr 87.5 p 32
Sell TSLA Mar 172.5 p 80

Wed Sell IWM Apr 94 p 41
Sell CMG Apr 610 c 95 More bad news from Chipotle

Sell DPZ Apr 115 p 30 add long
Sell TSLA Mar 180 p 104

Thu Sell TSLA Apr 260 c 92
Cover TSLA Mar 130 p 02 97% profit

Fri Sell ULTA Apr 160 p 90 New long position in Ulta Beauty, UTLA gapping higher on earnings

Cover SPY Mar 202 c 172 about a 200% loss
Cover UNH Mar 125 c 140 about a 300% loss

Saturday, March 05, 2016

Weekly: short covering

A nice 2% up week for the stock market has me scrambling. I cover four layers of SPY calls for big losses as the rally unfolds. The rally in DIS and TSLA is getting uncomfortable close to my mental stop levels. I initiate a new long in DPZ Dominos Pizza, a new short in MON Monsanto.

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).

Tue Big rally today. I came in net short. I cover some SPY call legs for big losses.

Sell DPZ Apr 115 p 70 new long position in Dominos Pizza
DPZ recently broke out on earnings news.
I add to position as it rallies:
Sell DPZ Mar 125 p 65

Sell TSLA Mar 155 p 88 rebalance
Sell SPY Mar 190 p 105

Cover SPY MarW1 197 c 165 about a -600% loss
Cover SPY MarW1 178 p 01 for a 98% gain

Sell BRKB Apr 120 p 50
Sell TSLA Mar 210 c 111 Tesla lower on news of hedge fund Citron shorting it.

Cover SPY MarW2 180 p 05 about a 90% gain
Cover SPY Mar 198 c 252 about a 500% loss

Sell V Apr 65 p 36

Thu Buy MON vertical put spread 240 debit
Buy Jul MON 80 p 398
Sell Jul MON 70 p 158

Sell TSLA Apr 125 p 93
Cover SPY MarW2 199 c 220 about a 700% loss

Fri Sell TSLA Mar 165 p 94

Cover SPY Mar 200 c 256 about a 150% loss
Cover SPY MarW2 200.5 c 162 about a 600% loss

Sell MON Mar 100 c 15

Roll CMG: Cover Mar 430 p 62 about a 70% gain
Sell CMG Apr 430 p 233 gross 175 credit