Friday, September 09, 2016

Weekly: Live long and prosper

This week Star Trek fans celebrated the 50th anniversary of the show. The Vulcan farewell is "live, long and prosper." Friday, the stock market hit its first bit of real turbulence since the Brexit scare. I am down for the week. I was cautious, but still got hit. For those tracking planet Mercury, it comes out of retrograde on 9/22/16.

I don't think this is the "big one," but as always we can only tell in hindsight. One trading buddy moved to 100% cash on Thursday. Good move. I don't do all-in, all-out, all-short kind of moves, so would never do that. My market timing tends to be no better than flipping coins, so mostly I manage risk, and mostly sell premium.

I thought a stock market decline would be good for bonds and gold, but on Friday all three went down. Highlights include a whipsaw loss in GDX, a new long position in AMZN that quickly went to red, a bearish ratio spread in FB. 

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 SPG Sep 200 p 19
Sell GDX SepW4 25 p 19

Sell GLD SepW4 123 p 31
Cover GDX Sep 28.5 c 83 for a 500% loss

Sell SPG Oct 190 p 59 add

AMZN 730/750 credit put vertical: 
Buy AMZN Sep 730 p 47
Sell AMZN Sep 750 p 97 gross 50

Big sell off on Friday. I came in light, but still took it on the chin. I sell calls, I short FB, I turn my put vertical AMZN into an iron condor. With gold, bonds and stocks all down, my thesis so far has been wrong. I thought a decline in stocks would mean a rally in bonds and gold. It ain't working out so far.

Fri Sell BRKB Oct 155 c 50

FB ratio spread: 
Buy FB Oct 110 p 118
Sell 2x FB Oct 110 p 27 each

Sell TLT Oct 126 p 25
Sell TLT Oct 145 c 18

Sell AMZN vertical: 
Sell AMZN Sep 792.5 c 98
Buy AMZN Sep 802.5 c 44

Sell TSLA Oct 235 c 83
Sell TSLA Sep 210 c 38

Sell GDX Oct 32.5 c 18
Sell GLD Oct 137 c 31

Sell SPG Oct 230 c 43

Sell BRKB SepW4 150 c 72
Sell BRKB Oct 155 c (2nd) 36

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