Weekly: TSLA whipsaw

This week’s whipsaw is Tesla. It dipped hard, and I covered one leg of sold puts for a huge loss, then the stock bounced. Last week was NVDA. So it goes for a trader that uses mental stops. Even with the whipsaw loss, I manage a small profit for the week. It is a bit disappointing with the market near record highs.

Going forward, there are theories about what happens next. Many portfolio managers are lagging SPY in performance for the year. The hedge fund managers don’t get paid unless they beat the index. So one theory is that they will take on that much more risk for the last quarter to try and leap frog ahead. Now what they might buy or short is another interesting question. Will they buy the leaders? The high beta stocks? The laggards? Hard to say what they will do as a group, because there are many individual managers or firms in that situation.

Here are the trades for my week (p = puts, c = calls, sell means sell-to-open, cover means buy-to-close, number near the end of line is price per contract, percentage gain/loss are basis the premium collected):

Mon Sell off in some leading stocks. I rebalance closer to delta neutral by hedging or selling more layers of calls.

Sell NVDA Oct 192.5 c 119Sell FB OctW2 175 c 43

Sell NVDA OctW2 190 c 89
Sell TSLA OctW1 390 c 50

Sell BABA Oct 190 c 35
Sell TSLA Oct 400 c 106

Sell MCD Nov 170 c 30

Tue Sell NVDA OctW2 157.5 p 48
Sell IBB Nov 285 p 65

Sell AAPL Nov 135 p 81
Sell SPY OctW1 242 p 18

Wed Sell SPG Nov 135 p 60Sell AAPL Oct 140 p 19

Sell FB OctW1 157.5 p 17
Cover SPY SepW5 239 p 01 for 97% profit

Thu Cover TSLA SepW5 340 p 595 for a 1200% lossSell IWM Nov 130 p 26
Sell TLSA Oct 390 c 84

Fri Cover TSLA Oct 450 c 02 for 97% profit
Cover BA SepW5 237.5 p 01 for 97% profit
Cover FB OctW1 157.5 p 05 for a 65% profit

Sell FB OctW2 162.5 p 38
Sell FB Oct 155 p 20

Weekly: Persnickety

The word for the week is persnickety. It means to be fussy about small details, to nit-pick, to find minor faults. It felt like that kind of week for me. I end up with a tiny plus sign, but it felt like I was losing money every day. First was a whipsaw on NVDA where I covered some calls for huge losses only to see the stock dip two days later. AAPL also caused some consternation as it dipped.

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

Mon NVDA run up continues, stops get taken out. I take some losses.
Cover NVDA SepW4 182.5 c 590 for a 1000% loss
Cover NVDA SepW5 185 c 555 for a 3500% loss, perhaps the worst percentage of 2017. Thankfully dollar amounts are small.

I sell some way otm calls but the debit is huge
Sell NVDA Oct 240 c 20
Sell NVDA SepW5 220 c 18

Sell QQQ Oct 133 p 20
Sell BRKB Oct 175 p 84

Sell TSLA SepW5 340 p 47
Sell BA SepW5 237.5 31

Tue Sell BRKB Nov 170 p 75Sell MCD Oct 165 c 18

Sell BRKB Oct 170 p 32
Sell BRKB Oct 177.5 p 95

Wed Sell MCD Oct 150 c 33
Sell FB Oct 155 p 28

Sell NVDA OctW1 210 c 38
Sell BRKB Nov 180 p 235

Thu Sell TSLA SepW5 400 c 23
Cover NVDA Oct 240 c 05

Sell NVDA SepW5 192.5 c 34
Cover NVDA SepW5 220 c 02

Sell AAPL Oct 170 c 25
Sell AAPL SepW5 162.5 c 14

Cover AAPL SepW5 c 02
Sell NVDA OctW1 c 94

Sell NVDA Oct 202.5 c 104

Fri Sell AAPL Nov 165 c 147
Sell AAPL Oct 135 p 23

Sell BA Nov 210 p 81
Sell TSLA SepW5 380 c 46

Cover TSLA SepW5 400 c 02

Monthly: Better and better, 65 - 5 grade A-

I count 65 winners, 5 loser for the September option cycle for my most profitable month of 2017. I am up about 2.9% for the month, up about 11.6% for 2017. Sure 11% isn’t all that when compared to the the trading unicorns and the YOLO crowd. However, for a relatively slow moving trader that is almost always hedged trader, I see it is as good news.

Here are a few etfs I track, best to worst:
EEM +30.2% emerging markets equity
GLD +14.5% gold

SPY +11.5% S&P 500, U.S. large cap
SLV +10.0% silver

TLT +6.5% 20-year Treasury bonds
IWM +5.6% Russell 2000, U.S. small cap

My trading account is right there with SPY with a gain of 11.6%.

SPY also gets an additional 1.5% in dividends (13% total return), so I am behind. That said, I feel like I am positioned at lower risk than buy-and-hold. A simliar return with what seems like less risk is a good thing. I managed profits, even though I felt like the market was due for a 5% drop in September. I did take some precautions, but didn’t let my bias get totally in the way of more profits. Like I said, this option cycle was my most profitable of the year.

I like to use the phrase, “listen to the markets.” Observe how the market responds to various event. Observe the stock market chatter online and in person. With so a lot of chatter about a sharp correction or crash, these events become less likely. Crashes tend to be rare events. Way too many newbies think crashes happen every year or two. Severe crashes are more like once every 20 to 30 years, so the time frame might be out to 2028 or later.

I plan to continue to listen going forward.While the major indexes have had a good year, there certainly have been sectors such as oil, retail, and most recently airlines that have way underperformed. Some stubborn investors have gone heavy into these laggards, and many have underperformed. There can be merit to investing in beaten down sectors. However, there is also the value trap. Investing in what seem like good values, without factoring in the secular decline in those businesses.

Weekly: more bull

Not even another missile launch could rattle the zombie bull market as it lurches forward. On Friday Nvidia broke out to the upside. I scramble to rebalance back near delta neutral. On Reddit, so many still seem to be looking for a sharp down move. Heck, I am one of them. However, I am not letting my bias get in the way of profits. The path of least resistance remains to the upside.

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

Mon Sell QQQ SepW4 138 p
Cover QQQ Sep 140 p 05 for 80% profitCover BABA SepW4 150 p 05 for 80% profit
Cover SPY Sep 235 p 04 for 90% profit

Sell SPY SepW5 239 p 36
Sell SPY Sep27 240 p 32
Sell QQQ SepW4 139 p 16

Tue Cover SPY Sep 249 c 115 for a 300% loss
Sell MCD Nov 140 p 64 add to longs on the dip

Sell SHOP Oct 80 p 20 new long

Sell TSLA strangle 215 credit: Sell TSLA Oct 300 p 154
Sell TSLA Oct 450 c 61

Wed Cover NVDA Sep 180 c 05 for 95% profit
Cover IWM Sep 142 c 54 for 325% loss

Thu Sell NVDA OctW1 145 p 22

Sell AAPL strangle for 37 credit: Sell AAPL SepW5 148 p 22
Sell AAPL SepW5 172.5 c 15

Roll BABA for 36 credit: Cover BABA Oct 140 p 15 for 70% profit
Sell BABA Oct 155 p 51

Cover GILD Sep 80 p 09 for a 25% profit

Fri Nvidia breaks out. I rebalance back to neutral.
Cover NVDA Sep 148 p 01 for 95% profit
Cover SPG Sep 165 c 05 for 90% profit
Cover BRKB Sep 165 c 01 for 98% profit

Sell BA Oct 215 p 40

Sell NVDA SepW4 165 p 23
Sell NVDA Oct 160 p 116
Sell NVDA SepW5 160 p 59

Sell TSLA SepW4 340 p 27
Sell SPG Oct 145 p 42
Sell BRKB Oct 175 p 94

Weekly: storm clouds

Hurricane Irma follows Harvey, and a possible hydrogen bomb test in North Korea over the weekend send stocks lower. I make a few modest moves, then the market recovers on Wednesday. BRK.B and some other insurance related stocks move lower, then rally. I close out one leg near the lows. I eek out a tiny gain for the week. New positions include selling a strangle on IBB, a bull credit spread on AMZN, new long in TRV.

Here are the trades (p = puts, c = calls, number near end is price per contract, percentage gain/loss is based on premium collected, actual gains/losses tend to be much smaller because of margin requirements)

Tue Another hurricane, and a bomb test in North Korea rattle the markets.
Sell BRKB Oct 185 c 86Sell NVDA SepW4 182.5 c 51

Sell GILD Oct 95 c 19
Sell RCL Oct 135 c 27

Sell BA Oct 270 c 18

Wed Sell NVDA Sep 148 p 29
Sell MCD Oct 145 p 35

Sell BABA SepW4 150 p 26
Sell HON Oct 115 p 21

Thu Berkshire knifes lower, probably on hurricane insurance losses.
Cover BRKB Sep 175 p 211 for a 325% loss

Sell IBB strangle: Sell IBB Oct 290 p 90
Sell IBB Oct 375 c 36

Sell GILD Sep 80 p 14

Fri Roll SPG: Cover SPG Sep 140 p 02Sell SPG Oct 145 p 99

Roll BRKB: Cover BRKB Sep 175 c
Sell BRKB Oct 180 c

AMZN vertical for 46 credit: Sell AMZN Sep 935 p
Buy AMZN Sep 915 p

Amazon continues lower so I go into the red by the end of the day.

Sell NVDA SepW4 185 c
Sell TRV Sep 110 p

Cover MCD Sep 140 p 02 for 85% gain

Cover AAPL SepW2 157.5 p 02 for 95% gain
I feel nervous about Apple and close the position with 45 minutes left.

Weekly: bears despair

The bears had a few days of hope in August, only to see the zombie bull crush them again. I was short a bunch of strangles, so the heat got turned up, but I made money this week. Most of the weekly options are coming in safe.

The technical evidence is strongly on the side of the bulls. So despite my prediction of a correction real soon now, I am staying mechanical, instead of letting my prediction creep into bias.

Mon Roll CMG for 53 credit: Cover CMG Sep 250 p 17 for 75% profit
Sell CMG Sep 275 p 70

Sell AAPL strangle: Sell AAPL Sep 145 p 20
Sell AAPL Sep 175 c 18

Sell LMT Oct 265 p 65
Sell NVDA Sep 180 c 58

Sell RCL Oct 100 p
Sell SPG Oct 175 c 41

Sell TSLA Sep 400 c 31

Wed Sell BABA Oct 140 p 53
Sell BA Oct 200 p 56

Sell QQQ Sep 135 p 17
Sell GILD Oct 70 p 21

Thu IWM SepW4 130 p 20
Sell SPY Sep 240 p 37

Sell AAPL SepW2 157.5 p 27
Sell BRKB Oct 170 p 86

Sell QQQ Sep 140 p 29

Cover SPY Sep 217 p 05
Cover SPY Sep 217 p 05

Fri Cover QQQ Sep 146 c 20 for breakevenRoll SPY: Cover SPY SepW2 236 p 05 for 85% profit
Sell SPY SepW4 240 p 43