Vacation update and late Monthly report: 122 -14 Grade B

I am back from my trip. Suffice it to say, I would have been better off not doing any trading. I took some big hits in NFLX, FB and am in the red on several other trades in GOOGL and other underlyings.

For the monthly option cycle ending 7/21/18, I count 122 winners 14 losers. Please understand that most are high probability trades, so a high win rate is baked into the cake. I use the strike price as a mental stop level. Some of the losers were big ones, whoppers 500% 1000% 3000% of the premium collecte.

Here are a few etfs, best to worst for 2018 performance:

IWM 10.5% Russell 2000 U.S. small cap
SPY 5.1% SP500 U.S. large cap

TLT -4.8% U.S. 20 year Treasury bonds
GLD -5.7% gold

EEM -6.7% emerging markets equity
SLV -8.8% silver

My account was +11.8% through July third week expiration. That's the good news. At that point, I was ahead of the pack, well ahead of SPY. Since then I lost a couple of percentage points, so the current year to date is more like +9%, which isn't bad, but it was better. It's been a tough couple of weeks and a day.

I decided not to post the trades during the time away. I’ll resume posting weekly trade summaries this Saturday. Someone asked me today, if this is a buying opportunity. My answer: I don’t know. The market will tell me what to do.

Rule #1 is to live to trade another day.

Vacation post 10-10-50 Freedom plan

I am away so won’t give the regular updates. I made a couple of trades, including a poorly timed selling of NFLX calls early Tuesday. That leg turned into a 600 percent loss when I closed it mid-day. Still, NFLX trades have been a net positive for me in 2018.

For the year SPY is up about 2.5 percent. My account up about 11 percent. Good news.

Anyway, I sometimes talk about what I call the 10-10-50 plan to financial freedom. If a person can live off half their wages, make 10 percent per year investing, in ten years they can be financially free.

For example, a person earns $50,000 a year. Save half of that for ten years and the straight amount is $250,000. Earn 10 percent a year on that and it is close to financial freedom. The simple example ignores taxes and inflation, but also leaves out any gains during the savings phase.

There is a lot more to life than money, but so many young people seem to yearn for that freedom, I think the idea worthwhile.

I’ll be back with full updates in August. Until then.

Weekly: Bully Bully and Vacation time

I’ll be traveling for two weeks, so updates may be delayed or not as detailed. Trading may be less, but I will still be checking the markets.

This week, markets rally with a brief pullback on tariff news. Mostly I keep adjusting by adding long delta. I take a loss on one leg on Facebook. I take profits on some other underlyings.

Mon Stocks rally on no news. That means the bias is higher
Sell TSLA Sep 200 p 415
Sell FB Sep 170 p 137

Sell IWM Aug 155 p 51
Sell QQQ Aug3 162 p 49

Sell SPY Aug3 263 p 55
Sell FB Aug 175 p 94

Sell IWM Aug10 159 p 52
Sell SPY Aug10 264 p 73
Tue Cover SPY Jul27 285 c 23 profit
Sell BA Sep 275 p 117

Sell QQQ Jul 170 p 29
Sell SPY Aug3 267 p 57

Sell PEP Aug 105 p 38 earnings
Sell NVDA Aug3 230 p 108

Wed Sell MA Aug 185 p 81
Sell FB Aug 250 c 19

Sell QQQ Aug 163 p 65
Sell SPY Aug24 260 p 84

Sell QQQ Aug24 163 p 76
Sell SPY Aug31 259 p 90

I take profits on some Netflix legs ahead of earnings.
Cover NFLX Jul 480 c 210 profit
Cover NFLX Jul 340 p 106 profit

Take a loss on this Facebook leg as it crosses the strike price
Cover FB Jul 205 c 300 loss

Take profits on some other options to adjust delta
Cover QQQ Jul 182 c 16 profit
Cover TSLA Jul 290 p 167 profit
Fri Take more profits on calls as the rally rolls on. All profits:
Cover AMZN Jul 1900 c 108
Cover BA Jul 365 c 44
Cover BA Aug 385 c 151

Sell SPY Sep 255 p 118

Again, I’ll be traveling for two weeks, so updates may be delayed or not as detailed.

Weekly: Another nightmare on Tesla street

A lot of my attention was on TSLA. I did poorly, suffering some big losses as it gapped higher on Monday, then dropped about 20% during the week. The good news is that I am up for the week, though not on Tesla positions.

Mon Wild day in Tesla. TSLA gaps higher on production news, than careens lower on a downgrade. I cover three positions, open three new ones. For the most part, I am on the wrong side of the price action, selling high, buying low, as I keep rebalancing to get closer to neutral. Despite mangling several trades, volatility crush in TSLA and a rally in the broad market leads me to a big gain for the day +1.6%.

Cover TSLA Jul6 300 p 103 for profit
Cover TSLA Jul 300 p 365 for profit
Roll for credit: Cover TSLA Jul13 400 c 80 for profit

Sell TSLA Jul13 375 c 201
Sell TSLA Jul13 315 p 207
Sell TSLA Jul 425 c 126
Sell TSLA Jul27 400 c 295

Tue It is an ugly down day. I lose 2.3%. Tesla giveth and taketh. TSLA down hard -24 to 310 after chief engineer resigns. I sell multiple layers of TSLA calls, but it is not enough with the big decline. I have some hard decisions to make as I am short three layers of puts at the 310 strike (right where TSLA closed). I didn’t close any of them yet. Facebook also down hard on more data sharing news.

Sell TSLA Jul 370 c 215
Sell TSLA Jul 377.5 c 143
Sell TSLA Jul6 365 c 22

Sell TSLA Jul 365 c 195
Sell FB Jul 205 c 67
Sell NVDA Jul 267.5 c 35

Wed July 4th Market holiday

Thu Morning weakness in Tesla takes out stops on four legs of sold puts. I bleed red ink taking huge losses on four legs. I cover a couple TSLA call legs for a profit, but it is mostly red. Thankfully, other positions offset the huge losses and I end the day in the green.

These four were huge losses:
Cover TSLA Jul6 310 p 741
Cover TSLA Jul 315 p 1550
Cover TSLA Jul13 305 p 1149
Cover TSLA Jul 310 p 1725

These two call legs are closed for modest profits
Cover TSLA Jul 365 c 128
Cover TSLA Jul 377.5 c 75

I take some risk off in other underlyings, these are profits:
Cover BA Jul 310 p 128
Cover SPY Aug 284 c 39
Cover QQQ Aug 185 c 28

The lone new position is
Sell TSLA Jul 250 p 112

Fri Markets open lower then rally. I mostly add long delta. Tesla stabilizes, but a lot of damage was done earlier in the week.

Sell TSLA Jul 357.5 c 105
Sell FB Aug 170 p 100
Sell QQQ Aug10 157.5 p 70

Sell IWM Aug3 156 p 47
Sell SPY Aug10 255 p 72
Sell SPG Aug 150 p 61

Sell FB Jul 187.5 p 38
Sell IWM Sep 150 p 92
Sell QQQ Sep 153 p 110
Sell SPY Sep 247 p 129

Cover SPY Jul 281 c 33 for profit