Weekly: Getting hit v Getting run over

At my stock market meetup, I hear the following:

You are going to get hit, but avoid getting run over.


A football analogy follows. If a quarterback holds the ball too long, odds of a big hit increase. Sometimes an incomplete pass or even taking a safe sack is a relatively good outcome. Bad outcomes would be a turnover, or injury. This lines up with my Rule #1: Live to trade another day. I use position sizing and mental stop loss levels to achieve this goal. I observe many novices trying to turn every trade into some kind of win. Sometimes it is better to throw the ball away and start over.


I get whipsawed near the lows on a few positions. The losses are big, but manageable. SMH semiconductors and XLF financials are leading the market lower. Financials and semis are about a 40% weight in the S&P 500, so the broad market can’t sustain a rally without these two sectors participating.


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


Mon Deep red floods my screen as trade war fears increase. I lose over 3% today. I take some profits, rebalance some other positions. A few underlyings are nearing my mental stop levels.


Sell BA Jul 365 c 93
Sell SPY Aug3 284 c 29
Sell IWM Aug 176 c 36
Sell NFLX Jul 480 c 315


Sell NVDA Jul 272.5 c 76
Sell QQQ Aug 185 c 46
Sell TSLA Jul 385 c 430
Sell BABA Jul 217.5 c 55

All these 12 covered for profit to reduce risk, if the move down continues.
Cover SPY Jul6 260 p 39
Cover SPY Jul 254 p 66
Cover SPY Jul13 254 p 68
Cover TSLA Jun29 300 p 144

Cover TSLA Jul 420 c 175 (roll down)
Cover QQQ Jul 153 p 46
Cover IWM Jul 148 p 32
Cover AAPL Jul 165 p 55

Cover FB Jul 175 p 84
Cover NFLX Jul 300 p 195
Cover NVDA Jun29 210 p 26
Cover QQQ Jul13 155 p 42

Tue Market has a mild up day after Monday’s steep sell off. I make up more than half the loss.
Sell SPG Aug 145 p 67
Sell GOOS Jul 67.5 c 17

Wed An ugly reversal day as the DOW loses a 300 point gain to close down over 160. I lose another 2.2%. I got busy the last hour of trading and several underlyings closed below mental stop levels. I plan to close them tomorrow.

Sell QQQ Jul 180 c 25
Sell SPY Aug 184 c 52

Sell TIF Aug 115 p 49
Sell TSLA Jul 290 p 263

Thu A mild rebound. I close out four positions for losses as they cross the mental stop level (strike price). Three of the four rebound by the end of the day, making for a frustrating whipsaw day. However, the theme it to take a hit, to avoid the chance of getting run over.

These four closed for losses:
Cover SPY Jun29 270 p 171
Cover CAT Jul 135 p 505
Cover WYNN Jul 165 p 635
Cover BABA Jul 185 p 715

I sell further out puts, but the main damage is done:
Sell BABA Jul 150 p 31
Sell CAT Jul 110 p 20
Sell WYNN Jul 135 p 17

Sell AMZN Jul 1900 c 140
Sell AMZN Jul 1380 p 158
Sell GRUB 121 c 22
Sell MA Jul 210 c 33

Sell XOP Aug 35 p 16
Sell RH Jul 175 c 15
Sell TIF Jul 145 c 22
Sell TSLA Jul27 300 p 550

Fri Another volatile day, as the market rallies then fades. Unfortunately, I add longs near the highs.

Sell QQQ Aug3 155 p 66
Sell MA Jul 180 p 36
Sell SPY Aug3 252.5 68

Sell NKE Jul 72.5 p 15
Sell SPY Jul 280 c 30
Sell IWM Jul 171 c 15

Weekly: Down we go

A rough week for me. I lose more than 2%. AMZN BA CAT TSLA lead the list of problem underlyings. DIA has eight straight down days before a relief rally on Friday. Tesla goes up quickly, then down quickly.

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

Mon Tesla rallies for the seventh day in a row.
Sell TSLA Jul 310 p 432

Sell TSLA Jun22 330 p 40
Sell TSLA Jul6 310 p 151

Sell FB Jul 180 p 59
Sell GOOS Jul 50 p 25 new long

Tue An additional $200 billion in tariffs against China, lead to a steep opening sell off. I take a big loss on one leg of sold Boeing puts. I cover some sold SPY puts for tiny profits, to reduce risk. Tesla finally dips on news.

Cover SPY Aug 254 p 118 all four for tiny profit
Cover SPY Jul 260 p 80
Cover SPY Jul13 260 p 64
Cover SPY Jul 257 p 71

Cover BA Jun29 340 p 715 for huge loss -650%
Sell SPY Jul27 285 p 33

Sell QQQ Aug 190 c 27
Sell BA Jul 380 c 120

Sell BA Aug 385 c 315
Sell BA Jun29 370 c 81

Sell TSLA Jul 450 c 195
Sell NVDA Jul 300 c 28

Sell WYNN Jul 200 c 39
Sell AAPL Jul 200 c 42

Sell IWM Jul 175 c 18
Sell TSLA Jul6 425 c 134

Sell NFLX Jul 330 p 209
Sell CAT Jul 162.5 c 18

Wed Markets recover. Netflix roars to new highs, over 414 now.
Sell IWM Jul27 157 p 50

Sell NFLX Jul 340 p 268
Sell QQQ Jul27 162.5 p 66

Sell SPY Jul27 258 p 67
Sell FB Jul13 185 p 76

Sell SHAK Aug 52.5 p 45
Sell FB Jul 185 p 77

Sell BA Jul 300 p 88
Sell IWM Jul27 157 p 50

Sell NFLX Jul 340 p 268
Sell QQQ Jul27 162.5 p 66

Sell SPY Jul27 p 258 67
Sell FB Jul13 185 p 76

Sell FB Jul 185 p 77
Sell SHAK Aug 52.5 p 45

Sell BA Jul 300 p 88
Sell TSLA Jul13 305 p 305

Sell IWM Jul 159 p 49

Roll AMZN for 244 credit: Cover AMZN Aug 1350 p 306 for profit
Sell AMZN Aug 1425 p 545

Thu Another leg down makes for painful day for me, as I lose another 1.2%, now down over 2% for the week. AMZN BA CAT being some of the bigger losers today.

Sell TSLA Jul13 340 c 220
Sell CAT Jul 160 c 19

Sell VLO Jul 130 c 15
Sell BA Jul13 380 c 39

Sell BA Jul 375 c 89
Sell AMZN Jul 2000 c 120

Fri Sell QQQ Jul 184 c 22
Sell TSLA Jul 420 c 295

Sell TSLA Jul13 400 c 260
Cover TSLA Jun 330 p 01 for peace of mind a few minutes before the close.

Monthly 84-6, Grade B

Another positive month for me, as the market rallies. I count 84 winners, 6 losers for this monthly option cycle. Market ran a bit too hot for me. I took some big losses on sold calls. Stupid loss on one Tesla leg, cost me big time. I sold a cheap option with high risk and suffered one of the biggest percentage losses ever, about 5500%. So the call buyer made about 55x their money. Most galling was that had I held until expiration, the option expired worthless.

The lesson isn’t to let it ride, because some other sold calls on NFLX and TSLA would have become even bigger losers had I not honored the mental stop loss levels and taken the hits.

Here are a few etfs that I track and their year-to-date performance:

IWM +10.1% Russell 2000 US small cap
SPY +4.2% S&P 500 US large cap

GLD -1.9% gold
SLV -2.4% silver

EEM -4.0% emerging markets equity
TLT -5.1% US 20-year treasuries

My trading account up 9.2%, which is good, not great. There is room for improvement. Last year’s big winner EEM is lagging this year. Gold and silver have been dead money for a while now. Bonds have trended lower. The cliché Sell in May hasn’t been working. I did lighten up a bit early in May. The strong rally had me rebalancing, and taking losses on some sold calls. Despite being wrong on the general market direction, I made close to 3% for the month. I’ll take that.

Going forward, the bull market is still intact. Far too many folks on Reddit, are far too cautious. Many in the fearful camp are relatively inexperienced folks being scared by click-bait type of articles, or focusing on one or two indicators. It isn’t all puppies and rainbows, but the preponderance of evidence favors a continued bull market.

I keep watching the yield curve. If all goes on schedule, the dreaded inverted yield curve will come into effect by late this year. This is a mild bear market indicator, so it doesn’t mean head for the hills. It may mean to lighten up and shift to a slightly bearish bias, from my slightly bullish bias.

Weekly: Netflix leads rally

Netflix is now worth more than Disney. I take a loss on some sold NFLX calls. Market dips on Friday, after more up days.

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

Mon Rally rolls on. I take a loss on some sold SPY calls.
Cover SPY Jun22 279 c 147 for 600% loss

Sell BA Aug 320 p 268
Sell NFLX Jul 315 p 258

Sell SPY Jul 265 p 105
Sell SPY Aug 261 p 151

Sell QQQ Aug 158 p 107

Tue Sell SPY Jul6 266 p 53
Sell TSLA Jun29 300 p 199

Wed Netflix rallies on news. Market fades late after Fed hike and news.
Cover NFLX Jun 370 c 470 for 500% loss

Sell TLSA Jun22 300 p 101
Sell QQQ Jun29 167 p 34

Sell SPY Jun29 270 p 55
Sell NFLX Jul 500 c 52

Thu Sell IWM Aug 152 p 65
Sell RH Jul 125 p 95 new long

Sell QQQ Jul 164 p 57
Sell TSLA Jul 300 p 385

Sell TSLA Jul6 300 p 234

Fri Sell BA Jul 400 c 62
Sell BA Aug 430 c 57

Sell SPY Aug 290 c 51

Weekly: Nightmare on Tesla street

DIA has its best week of the year, up 2.8%, other averages up big too. TSLA has a huge rally after its shareholder meeting. I get burned badly, closing some sold calls near the top of the move. Thankfully the positions are small. The pain is real, especially with a reversal after I cover. Despite the TSLA crap storm and a 5500% loss on one leg, I eek out a tiny gain for the week.

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

Mon Rally rolls on. Nasdaq at a new high.

Cover QQQ Jun 173 c 205 for big loss
Sell SPY Jun22 261 p 44

Sell SPY Jul 257 p 100
Sell AAPL Jul 175 p 60

Sell IWM Jul6 152.5 p 38
Sell QQQ Jul6 161 p 47

Sell NFLX Jun29 325 p 136
Sell WYNN Jul 210 c 75

Sell NVDA strangle 201: Sell NVDA Jul 235 p
Sell NVDA 315 c

Sell TSLA Jun 260 p 65
Sell SPY Jun 265 p 37

Roll AMZN for 529 credit: Cover AMZN Jul 1350 p 170
Sell AMZN Aug 1350 p 699

Tue Sell FB Jul6 177.5 p 54
Sell GRUB Jul 90 p 47

Sell SPY Jul6 260 p 68
Sell TSLA Jun8 322.5 c 15

Sell QQQ Aug 150 p 59
Sell WYNN Jun 190 c 42

Wed Tesla up after shareholders meeting.
Sell TSLA Jun22 275 p 197

Sell TLSA Jun 280 p 100
Sell BA Jul 325 p 160

Sell SPY Jul13 260 p 71
Sell SPY Aug 254 p 130

Roll BABA for 73 credit: Cover BABA Jul 165 p 19 for profit
Sell BABA Jul 185 p 92

Rally picks up speed, I scramble to add more long delta.

Sell TSLA Jun 290 p 122
Sell BA Jun29 340 p 96

Sell SPY Jun22 266 p 42
Sell SPY Jul 260 p 87

Sell QQQ Jul 161 p 61
Sell TSLA Jun29 280 p 227

Thu Tesla rallies again. It becomes a nightmare day for me, as I cover sold calls for huge losses near the top, then TSLA reverses. Yikes. Thank goodness for small position sizing.

Cover TSLA Jun8 322.5 c 845 might be biggest percentage loss ever 5500% range. Call buyers could have made 55x their money, trading opposite me. By the end of the day, TSLA lower.

Cover TSLA Jun 330 c 935 near the exact top about a 2000% loss. Ouch. Double ouch that it was the top of the day so far.
Sell TSLA Jun 295 p 112

Sell TSLA Jun 390 c 34
Sell TSLA Jun22 375 c 84

Sell TSLA Jun29 395 c 52
Sell BABA Jul 240 c 36

Sell FB Jul 215 c 31
Sell SPY Jul 265 p 110

Fri Sell SPY Jul 262 p 92
Sell COST Jul 185 p 41

Weekly: Yo-Yo market

Market drops, then recovers, drops then recovers in yo-yo action. Overall, the market and my account are up for the week.

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

Tue News from Italy is the catalyst for a market drop.
Sell SPY Jun22 279 c 21
Sell NVDA Jun29 210 p 51

Sell SHAK Jul 47.5 p 25
Sell CMG Jun 395 p 90

Sell CMG Jun 500 c 20
Sell MSFT Jun 92 p 20

Sell QQQ Jun29 c 15
Sell SPY Jul 281 c 40

Sell BRKB Jul 210 c 47
Sell JPM Jun 115 c 12

Wed Markets rebound, then gain strength. I add long delta through out the day.
Sell DVN Jul 35 p 27

Sell FB Jun29 167.5 p 41
Sell HES Jul 50 p 31 31

Sell MA Jul 170 p 79
Sell NFLX Jun29 300 p 86

Sell QQQ Jul6 155 p 53
Sell SPY Jun29 255 p 75

Sell JPM Jul 95 p 41
Sell TSLA Jun 245 p 70

Sell BRKB Jul 175 p 56
Sell TIF Jul 110 p 29

Sell MU Jul 45 p 17
Sell IWM Jun 153 p 18

Sell SPG Jul 145 p 46
Sell QQQ Jul 153 p 72

Sell SPY Jul 251 p 109
Sell IWM Jun29 153 p

Thu Yo-yo market goes back down.
Sell GRUB Jun 92.5 p 20
Sell TSLA Jun 330 c 41

Sell BA Jun 380 c 28
Sell FB Jun29 212.5 c 23
Sell AAPL Jul 210 c 20

Fri Week ends on a positive note. Costco and Ulta Beauty modestly lower on earnings.
Sell QQQ Jul13 155 p 51
Sell SPY Jul13 254 p 84

Sell COST Jun 210 c 10
Sell MU Jul 90 c 11

Sell QQQ Jul 157 p 65
Sell FB Jul 175 p 88

Sell SPY Jul 254 p 102
Sell NFLX Jul 300 p 251
Sell BA Aug 295 p 196