Saturday, May 14, 2016

Weekly: MON Nightmare scenario

SPY was down about 1% for the week, I was down about the same. Thursday was a nightmare morning. . I came into the day short three tranches of calls on Monsanto. MON gapped higher on take over rumors. I did trading triage, closing one leg for a huge loss, and bought some stock to cover one of the other legs. It may have been my worst day of 2016. 

The rest of the week had some of the normal ebb and flow. I sold strangles before Disney earnings and those are in the green so far. I closed out some SPY puts at what turns out to be a poor time.

Here are the trades (c = calls, p = puts, all are third week expiration unless noted, sell means sell-to-open, cover means buy-to-close, number is price per contract)

Mon Sell GDX May 26.5 c 19
Sell GLD May 126 c 20

Cover CMG May 335 p 05 90% profit
Sell CMG May 407.5 p 70 roll

Sell MCD Jun 120 p 40 rebalance
Sell MCD May 125 p 18

Cover IWM May 90 p 01 97% profit

Cover JNJ May 115 c 81 450% loss
Cover MON May 89 p 151 300% loss

Sell SCTY Jun 25 c 21 earnings

Sell strangle: DIS May 97.5 p 15
Sell DIS May 114 c 13, ahead of earnings
Sell-to-close SPY Jul 200 p 285 1% profit :)

Cover May SPY 190 p 04 95% profit
Cover FB May 90 p 01 95% profit

Sell FB May 113 p 20
Sell TLT Jun 140 c 18

Wed Sell TSLA May 190 p 78 rebalance 
As Tesla catches a bid

Thu Cover SPY May 199 p 15 66% gain
Cover SPY May 185 p 02 96% gain

Buy shares MON market 100.4
It is a nightmare scenario, Monsanto gaps higher on takeover rumors and I am short three tranches of calls. I do triage. I free up some buying power first, then place a market order to buy some MON shares. The May options are $3 wide this morning, so there is no exit by covering those right now, not without taking another huge hit. Ouch.

Cover MON Jun 100 c 450 about a 1200% loss
After the first half hour of trading, the options markets become more normal and I exit one leg. I am close to a manageable position now on MON, but have paid a heavy price to get there.

Sell AAPL Jun 100 c 34 rebalance Apple at a 52-week low

Fri Cover CMG May 407.5 p 23 for 70% profit, need buying power

Sell NVDA Jun 35 p 22 earnings

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