Weekly: Burritos and Bezos

The week was meh for me as I lose a tiny bit. News includes poor earnings for Chipotle and booming results for Amazon. Jeff Bezos from Amazon made approximately $8 billion on Friday, which is about the current market cap for CMG. I pivoted from near delta neutral short strangles to net short on CMG. I didn’t lose much there. I didn’t play AMZN.

I took on water in biotech etf IBB. I initiate some new longs and have mixed results. I close out my bottom fishing expedition in GE with a humbling loss.

Friday was as close to a melt up as I’ve seen. Like I said I was down for the week, and that feels twice as bad when the major averages are booming ahead. I got assigned on some AAPL calls. An oversight, I plan to close early on Monday.

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

Tue I initiate new longs in Stanley Tools, 3M Corp, and Caterpillar after earnings.

Sell SWK Dec 155 p 100
Sell MMM Dec 220 p 108

Sell CAT Dec 155 c 28
Sell NVDA Nov 230 c 128

Sell SPG Dec 145 p 77

Wed Sell TSLA strangles:

Sell TSLA Nov 250 p 62
Sell TSLA Nov 405 c 57

Sell ADBE Nov 190 c 15
Sell NVDA OctW4 202.5 c 20

Cover BABA Oct 190 c 02 for gain
Cover BABA OctW4 172.5 p 235 for loss

Sell SWK Dec 175 c 40
Sell NOC Dec 275 p 105

I pivot to net short on Chipotle after poor earnings
Sell CMG Dec 350 c 80
Sell CMG Nov 325 c 50

Sell CAT Dec 120 p 40
Sell BA Nov 285 c 21

Thu Sell NSC Dec 115 p 45
Sell WMT Dec 77.5 p 17

Cover CMG Dec 435 c 05 for gain
Sell IBB Dec 350 c 70

Fri Tech stocks leap higher, led by Amazon and Google on earnings
Sell QQQ Dec 142 p 77
Sell AAPL Dec 145 36

Cover GE Nov 21 p 81 for loss
Sell AAPL Nov 148 p 71

Sell MSFT Dec 77.5 p 27
Sell NFLX Nov 175 p 46

Sat Assignment! AAPL OctW4 162.5 calls assigned, I got busy and didn’t see this one. I plan to close it out early Monday.

Monthly: Smelling like a rose, 63-8, Grade B+

I count 63 winners, 8 losers for the October option cycle. Grade B+. There are costly whipsaws in NVDA and TSLA. I am up about 14% for the year, which is good, but nothing amazing.

Here are some etfs I track and their ytd performance, best to worst:

EEM +32.1% emerging markets equity
SPY +15.0% S&P 500, US large cap

IWM +11.2% Russell 2000 US small cap
GLD +10.9% gold

SLV +6.4% silver
TLT +4.1% US 20-year treasury bonds

Precious metals and bonds are slipping, after a strong first half of the year. Equities continue to power ahead. The surprise continues to be EEM considering the chatter about trade wars early in the year. My trading account is at +14% s, right in line with SPY and IWM.

Again, for newer readers, I tend to describe myself as a cautious, slow moving options trader. During strong bull moves I often lag. Considering that I expected a 5% to 8% correction in September/October, and made several trades in early September based on that, I have come out smelling like a rose.

I try not to let my expectations paint me into a corner. Listen to the markets. It remains a bull market. Those expecting a sharp pullback to let them in have been waiting for years now. I signaled a red flag warning on this blog in April 2014 at SPY 187 mostly based on valuations. SPY is 257 today, almost 40% higher in 3 1/2 years. If I had stayed stuck on valuation warnings, I would have missed out on those gains, Some traders have taken losses while the most hated bull market of all time, continues to march to new highs.

Weekly: ADBE CMG PYPL ULTA

I initiate positions in ADBE CMG PYPL ULTA. Otherwise, not too much going on. I nip and tuck at other existing positions. Markets continue their slow yeast rise. Will the souffle crumble? Way too many novices seem worried about the market for any significant downside.

Here are the trades (p = puts, c = calls, sell means sell-to-cover, cover means buy-to-close, percentage gain/loss are based on the premium collected, number near the end is price per contract).

Mon Sell CMG Strangle: Sell CMG Dec 435 c 41
Sell CMG Dec 240 p 90

Sell LMT Dec 285 p 85
Cover BA Oct 215 p 02 for 95% profit

Roll BRKB for 195 debit: Cover BRKB Oct 180 c 800 for 470% loss
Sell BRKB Dec 185 c 605

Sell IBB Dec 290 p 70
Sell AAPL NovW1 147 p 53

Tue Sell BABA OctW4 190 c 22

Thu Sell BRKB Dec 200 c 45Sell ULTA Nov 175 p 65

Cover SPG Oct 140 p 01 for 98% gain
Sell ADBE Nov 155 p 39

Sell UNH Nov 190 p 49
Sell AAPL OctW4 162.5 c 20

Fri Sell UNH Dec 185 p 65
Sell ADBE Dec 150 p 71

Sell PYPL Nov 65 p 19
Sell QQQ Dec 133 p 41

Cover TSLA Oct 400 c 01 for 99% gain

Weekly: Not enough bull, bottom fish GE, M

I am up for the week, but take a few more losses. I get whipsawed in Shopify and cover some calls in Nvidia and McDonalds for losses. Overall, I wasn’t bullish enough.

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

Mon I rebalance in BABA, FB, NVDA
Cover NVDA OctW2 157.5 p 02Cover SHOP Oct 125 c 05

Sell NVDA OctW2 175 p 14
Sell FB OctW2 167.5 p 12

Cover FB OctW2 162.5 p 05
Sell FB Oct 165 p 40

Sell BABA Oct 170 p 43
Cover BABA Oct 155 p 05

Tue Crunch time in Shopify as I close one leg for a huge loss. I close some trades for gains to free up buying power. I add more layers to Nvidia as it rallies.

Cover SHOP Oct 90 p 380 for a 550% loss
Cover BRKB Oct 175 p 05 for 95% gain

Sell NVDA OctW2 177.5 p 20
Sell MCD Dec 140 p 38

Sell NVDA OctW2 180 p 33
Cover TSLA OctW2 390 c 03 for 85% gain

Sell MCD Nov 145 p 29
Cover MCD Oct 145 p 01 for 97% gain

Cover SPG Oct 145 p 03 for 97% gain
Cover SPY Oct 225 p 04 for 98% gain

Sell NVDA OctW4 175 p 118

Wed I am stopped out on one leg for Nvidia.Cover NVDA OctW2 190 c 248 for 180% loss

I chicken out on Netflix before earnings, taking small profits.
Cover NFLX Oct 240 c 36 for 25% profit
Cover NFLX Oct 162.5 p 29 for 20% profit

Sell MCD Oct 157.5 p 17
Sell BABA OctW4 172.5 p 60

Thu I go bottom fishing in Macys and General Electric
Sell M Nov 18 p 29

Sell GE Nov 21 p 16
Sell MCD Nov 155 p 88

Roll BRKB for 270 debit: Cover Oct 180 c 620 for 90% loss
Sell BRKB Nov 185 c 250

Fri Rallies in McDonalds and Nvidia trigger more stops, more big losses.

Cover MCD Oct 165 c 136 for 750% loss
Cover TSLA Oct 300 p 05 for 97% gain

Sell MCD Nov 150 p 33
Sell SPY Dec 240 p 108

Sell NVDA OctW4 210 c 63

Cover NVDA Oct 192.5 c 340 for 190% loss

Cover FB Oct 155 p 03 for 85% gain

 

Weekly: broken record

The stock market breaks records. Multiple consecutive record highs for SPY for the best run in 20 years. Most the indexes march to record high after record high. My comments may sound like a broken record with descriptions such as zombie bull, the most hated bull market of all time. Newbies and Chicken Littles continue to call for the sky has to fall. Old timers might remember the cliche, don’t fight the tape. The tape is strong. Transports have confirmed record highs. The Russell 2000 is picking up speed.

I make money, but not as much as more aggressive bulls. This tends to be the fate during a strong bull move, for the cautious, hedging, often delta neutral trader.

One possible danger is a blow off top. However, to get there, we need an acceleration to the upside, such as a 10% market gain in a month or 20% in three months. Without that, there are still way too investors positioned defensively. Many are waiting for a minor 5% dip to get in. I thought we would get that dip in September, but it didn’t happen.

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

Mon Berkshire rally rolls on, I scramble to stay near delta neutral, then throw in with the bulls.

Cover BRKB Oct 165 p 03Sell BRKB Nov 175 p 83

Sell BRKB Dec 185 p 420
Sell QQQ Nov 135 p 51

Sell IWM OctW4 137 p 21
Sell TSLA OctW1 297.5 p 20

Sell SPY Nov 235 p 51

Tue Roll some, rebalance some
Cover LMT Oct 265 p 05 for 92% gainSell LMT Nov 280 p 60

Sell TSLA OctW2 390 c 21
Sell TSLA OctW2 300 p 31

Cover TSLA OctW1 297.5 p 03 for 83% gain
Cover TSLA OctW1 390 c 02 for a 95% gain

Sell BRKB Nov 185 p 250
Cover BRKB Oct 185 c 256 for a 200% loss

Sell AAPL Oct 147 p 43
Cover AAPL Oct 135 p 03 for a 90% gain

Wed More adjustments, add more legs on Shopify as it drops on comments
Sell RCL Oct 112 p 25
Cover RCL Oct 100 p 02 for 95% gain

Sell SHOP Oct 125 c 25
Sell SHOP Oct 90 p 60

Sell BABA OctW2 167.5 p 24
Cover IBB Oct 290 p 05 for 95% gain

Sell TSLA Oct 310 p 62
Cover HON Oct 115 p 03 for 85% gain

Thu Sell IWM Dec 135 p 62Sell NVDA OctW4 162.5 p 68

Sell FB Oct 160 p 31
Cover QQQ Oct 133 p 03 for 83% gain

Cover BRKB Oct 170 p 02 for 95% gain
Sell SHOP OctW1 93 p 35

Sell SHOP Oct 85 p 55
Cover NVDA OctW1 145 p 01 for 97% gain

Cover NVDA OctW1 210 c 01 for 98% gain
Cover NVDA OctW1 195 c 01 for 97% gain

Sell SHOP Oct 107 c 95

Fri Sell TSLA OctW2 325 p 19
Sell QQQ Oct 142 p 13

Cover IBB Oct 375 c 05 for 85% gain
Cover BA Oct 200 p 04 for 93% gain

Sell AAPL OctW4 148 p 51
Cover TSLA OctW2 300 p 03 for 90% gain

Cover AAPL Oct 140 p 05 for a 80% gain
Sell NFLX strangle 92: Sell NFLX Oct 162.5 p 40

Sell NFLX Oct 240 c 52