Saturday, August 26, 2017

Weekly: flat footed rally

The big rally on Tuesday caught me flat footed. I got whipsawed on Monday on some SPY puts. However, despite those minor mishaps, the week was profitable. Profits are good. Spent a lot of time managing BRKB, IWM, NVDA, TSLA positions. Added a new long in XME, sold new strangles in BABA, CMG. Thankfully the rally didn't roar ahead, otherwise I would have been hit on both ends.

Here are the trades (p = puts, c = calls, sell means sell-to-open, number near end is price per contract, cover means buy-to-close):

Mon Cover SPY AugW4 242.5 p 136 for a 400% loss
Sell TSLA AugW4 262.5 c 28
Sell NVDA SepW2 175 c 73

Roll IWM: Cover IWM Sep 146 c 01 for 90% gain
Sell IWM Sep 142 c 15

Sell SPY AugW4 237 p 13
Sell TSLA SepW1 372.5 c 49
Sell SPY SepW1 234 p 24

Tue Big time market rally catches me flat footed. I add long delta via selling puts

Sell SPY SepW2 236 p 35
Sell BRKB Oct 165 p 52

Cover TSLA AugW4 385 c 02 for 94% profit

Roll BRKB for 167 credit: Cover BRKB Sep 180 c for 225% loss
Sell BRKB Oct 180 c 349

Sell IWM SepW1 131 p 19
Sell SPY Sep 235 p 54
Sell QQQ SepW1 138 p 17

Sell BRKB Sep 175 p 52
Sell TSLA SepW1 300 p 47

Wed Sell NVDA SepW2 148 p 55

Sell BABA strangle 64: Sell BABA Sep 152.5 p
Sell BABA Sep 195 c

Sell CMG strangle 120: Sell CMG Sep 250 p
Sell CMG Sep 340 c

Sell TSLA Sep 310 p 162

Thu Sell SPG Oct 140 p 74
Sell XME Oct 27 p 21

Saturday, August 19, 2017

Monthly: Fragile Market, Grade C+ 72-9

I count 72 winners, 9 losers for the August option cycle. The good news is that I closed the 2017 performance gap with SPY. The bad news is that I did that with SPY falling back, and had a minor loss for the month. Boeing, Facebook were two of the problem stocks this month. Both went higher than I thought they would.

A good adjective is fragile, this seems a fragile market, with possible frustration for both bulls and bears. It was a stressful month of trading with some relatively big up and big down days.

Here are some etfs and their YTD performance, best to worst:

EEM +24.7% emerging market equity
GLD +11.6% gold

SPY +8.6% U.S. large cap stocks
SLV +6.6% silver

TLT +6.3% US 20-year treasury bond etf
IWM +0.1% Russell 2000 US small cap

My trading account +8.7% nominally ahead of SPY, but both SPY and TLT also add about 1% in dividends. U.S. small cap stocks, as measured by the Russell 2000, are now basically flat for 2017. Gold has leapt ahead of SPY in year-to-date performance. I am hanging in there. Who would have guessed that EEM is way ahead of the pack, given the election rhetoric.

Going forward, I have a mish-mosh of positions, with a lot of free cash after expiration. As with most premium sellers, a big move either way causes a lot of consternation. I believe that any downside action will be contained. It has been so long since 5% or 10% down moves, that there is a ton of money waiting to buy a dip. This means that the first dip is likely to be met by a large number of buyers.

The wildcard is unforeseen events. Possible events that are on the front burner, such as North Korea, debt ceiling, legislative gridlock, are extremely unlikely to be the catalyst for a bear market decline. I don’t have a clear plan or position at this point. Even if I did, I can change and adapt relatively quickly. As always, my moves tend to be relatively cautious, mostly low risk, low reward plays. With premiums still relatively low, it is often very low reward. I still have a working theory of a 5% decline into Sep/Oct, but the air drop decline on Thursday would make an immediate decline painful. Time and price are both important, and virtually no one gets both right on the nose.

Weekly: safe harbor

It was a rocky week, with a big up day, and a big down day. For the most part I made it into harbor safely. I made a lot of trades, but nothing noteworthy. A lot of rolling and rebalancing, and closing out trades for profit.

Here are the trades (p = puts, c = calls, number near the end is price per contract):

Mon Sell NVDA SepW1 140 p 52

Roll IWM: Cover IWM Aug 129 p 03 for 93% profitSell IWM AugW4 132 p 24

Market makers finally letting me out of some Boeing positions to free up buying power. I entered many orders last week to cover these, but they would not fill me.
Cover BA Aug 170 p 01 for 99% profit
Cover BA Aug 175 p 01 for 98% profit
Cover BA Aug 180 p 01 for 98% profit

Mind you, these profits were more than offset by the huge loss on sold calls.

Sell TSLA AugW4 325 p 74
Sell SPY Aug 242 p 25

Roll NVDA: Cover NVDA Aug 120 p 01 for 98% profit
Sell NVDA Aug 152.5 p 18

Roll BRKB: Cover BRKB Aug 172.5 p 05 for 77% profit
Sell BRKB Sep 170 p 51

Tue I take profits on three positions:
Cover COST Aug 145 p 03
Cover JPM Aug 82.5 p 01
Cover TSLA AUg 310 p 03

Wed Roll SPY: Cover SPY Aug 242 p 05
Sell SPY AugW4 242.5 p 28

Sell QQQ AugW4 140 p 18
Sell AAPL AugW4 152.5 p 20

Roll BRKB: Cover BRKB Aug 165 p 01
Sell BRKB Sep 170 p 34

Sell NVDA SepW1 182.5 c 54

Thu Sell SPY AugW4 248 c 18Sell NVDA AugW4 175 c 34

Cover TSLA Aug 295 p 01
Sell QQQ SepW1 146 c 23

Sell AAPL AugW4 167.5 c
Cover TSLA Aug 400 c 01

Sell TSLA AugW4 385 c 38
Cover NVDA Aug 175 c 01

Fri Sell NVDA SepW1 175 c
Cover NFLX Aug 162.5 p 02

Sell NFLX AugW4 148 p 24
Sell MCD Sep 140 p 17

Cover SPG Sep 175 c 02
Sell SPG Sep 165 c 43

Cover QQQ Sep 152 c 02
Cover QQQ Aug 135 p 01

Cover CAT Aug 105 p 01
Sell QQQ Sep 147 c 30

Cover SPY AugW4 c 03
Sell SPY Sep 249 c 30

Friday, August 11, 2017

Weekly: Fire and Fury

Tension between North Korea and the U.S., is cited as a reason for the big drop on Thursday. Nvidia earnings were good, but the stock dropped. Most of my losses for the week were from NVDA. I go further and further out on selling premium. My account balance was down, but the losses are modest.

Here are the trades (p = puts, c = calls, sell means sell-to-open, cover means buy-to-close, number is price per contract).

Mon Sell TSLA Aug 310 p 46 rebalanceSell LMT Sep 275 p 65

Sell NVDA AugW2 142 p 24 pre-earnings

Wed BA got assigned Aug 220 calls, I had 100 shares long bot at 228
I sold the calls for about 50 cents, so about a 1600% loss on that option leg.

Sell NFLX Aug 162.5 p 44
Sell AAPL Aug 150 p 18

Thu Market dips. I sell calls to hedge sold puts.
Sell NFLX Aug 190 c 12

Sell SPY Aug 249 c 18
Sell QQQ Aug 146 c 11

Sell SPG Sep 175 c 33
Sell LMT Sep 330 c 20

Sell NVDA AugW2 205 c 19
Sell IWM Sep 118 p 26

Sell IWM Sep 146 c 13
Sell AAPL Aug 165 c 15

Sell SPY Sep 252 c 21
Sell ILMN Sep 240 c 40 new long

Fri Nvidia dips on earnings, I rebalanceSell NVDA Aug 175 c 47
Sell NVDA Aug 182.5 c 20

Sell NVDA Aug 140 p 22
Sell NVDA Aug 172.5 c 28

Cover (buy-to-close) NVDA Aug 200 c 03
Cover (buy-to-close) BA Aug 185 p 02

Saturday, August 05, 2017

Weekly: If I knew better, I'd do better

If I knew better, I’d do better. After last week’s losses, I was more cautious. The week was profitable, but could have been better. Took a loss on a Costco leg, new long position in ILMN. Made money on TSLA, even with the big up move.

Here are trades: (p = puts, c = calls, number near the end is price per contract):

Mon Sell BA Aug 217.5 p 30
Sell NVDA Aug 200 c 61

Sell HON Sep 125 p 27
Sell COST Aug 150 p 53

Tue Cover BRKB Aug 175 c 247 for a 180% loss
Roll: Cover TSLA AugW1 400 c 04 for a 90% gain
Sell TSLA AugW1 360 c 51

Sell BA Aug 255 c 15

Wed Sell ILMN Sep 160 p 60 new longSell BRKB Sep 165 p 48 rebalance

Sell AAPL Aug 144 p 17 new long

Cover AMD Aug 13.5 p 69 for a 300% loss
Cover COST Aug 160 c 247 for a 1000% loss

Cover BRKB Aug 160 p 02 for a 95% gain
Cover SPG Aug 140 p 05 for 90% gain

Thu Roll TSLA: Cover TSLA AugW1 275 p 01 for 98% profit
Sell TSLA Aug 295 p 66

Sell COST Aug 167.5 c 13
Sell AAPL Aug 1675.5 c 10

Fri Roll: Cover TSLA AugW1 360 c 04 for 90% profitSell TSLA Aug 400 c 24

Sell BRKB Aug 172.5 p 24
Sell RCL Sep 105 p 26

Profits: Cover QQQ Aug 130 p 03
Cover HON Aug 120 p 02
Cover NVDA Aug 240 c 04