Weekly: Chipotle sours my week

CMG was the big stinker this week. A downgrade, and other news drops Chipotle stock. I take a big loss on one leg as it breaches my mental stop level. Overall, I end the mostly quiet week with a miniscule loss. AMZN NFLX run too hot for my taste, causing some legs to drift into the red.

September/October can be treacherous months in the market. However, sentiment continues to be promising, with very little public chatter about the stock market at social gatherings, and newbie after newbie asking about crash scenarios online. While no indicator is 100%, sentiment at major market tops tends have a lot of people talking about the market, and a lot of newbies dreaming of trading for a living.

A lot of time and energy is being taken up by my upcoming move, so I haven’t been as active in the markets. I did open new long positions in risky stocks such as PAYC SPNK TLRY. Enjoy the long weekend.

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 Records highs. The most hated bull market in history continues to roll.

Sell SPLK Sep 105 p 51
Sell TSLA Sep 400 c 49

Sell PAYC Sep 135 p 60
Sell CMG Sep 565 c 75

Sell SPY Oct5 272.5 p 77
Sell QQQ Sep28 170 p 48

Sell AMZN Sep 2200 c 60
Sell AMZN Oct 1525 p 196

Tue BestBuy down on earnings.
Sell BBY Sep 85 c 15 turning position into a strangle

Sell SPY Sep 275 p 42
Sell QQQ Sep 173 p 40

Wed Tilray up on earnings
Sell TLRY Sep 33 p 25
Sell SPY Nov 262 p 126

Sell QQQ Oct 165 p 50
Sell IWM Sep28 162 p 41

Sell AMZN Sep28 1700 p 154
Sell AAPL Oct 195 p 60

Sell TLRY Sep 35 p 50
Sell TSLA Sep28 400 c

Thu Sell TGT Oct 75 p 18
Sell QQQ Nov 160 p 76
Sell IWM Nov 150 p 57

Fri Chipotle continues lower. I take a big loss on one leg
Cover CMG Sep 475 p 1240 big loss
Cover CMG Sep 600 c 05 profit
Cover SPY Aug31 292 c 03 profit

Sell SPY Oct 307 c 17
Sell NFLX Sep 310 p 30
Sell CMG Sep 430 p 145

Weekly: New all time highs

Most of US stock indexes record new all time highs. The advance/decline line, transports confirm the high. The bearish case includes valuations, narrowing leadership. However, the tale of the tape is bullish. Don’t fight the tape. This week new longs include: TGT LOW JWM PANW TWLO. I sell way out of the money puts. My thinking is that any decline is likely to be contained to 10%.

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 New all time high for SPY
Sell SPY Sep28 270 p 87

Sell BRKB Oct 190 p 58
Sell AAPL Sep 190 p 37

Sell JWM Oct 50 p 33
Sell SPG Oct 160 p 53

Sell TGT Sep 72.5 p 32 pre-earnings
Sell UNH Sep 240 p 53

Wed Target and Lowes go up on earnings
Sell TGT Sep 77.5 p 17

Sell LOW Sep 95 p 23
Sell IWM Oct 155 p 63

Sell QQQ Oct 160 p 78
Sell BBY Sep 65 p 19

Roll CMG for 195 credit: Cover Sep 410 p for profit
Sell CMG Sep 475 p 229

Thu I sell some puts way, way out of the money. The trade off is high probability, for tiny reward, relatively large risk. My thinking is that any new decline will likely be contained at 10%, so want to sell at least 10% out of the money.

Sell PANW Sep 180 p 87
Sell GRUB Sep 115 p 45

Sell AMZN Sep28 1500 p 109
Sell HON Sep 145 p 23

Fri Sell TWLO Sep 65 p 31
Sell SPY Oct 265 p 98
Sell NFLX Sep 300 p 51

Monthly: Loserville 70-4 grade C-

I lose a little over 1% for the August option cycle. I count 70 winners 4 losers, which sounds great until you hear the size of the losses. I get whipsawed in Chipotle, taking a 2000% loss on one leg

Here are some etfs best to worst, 2018 ytd performance:

IWM +10.5% Russell 2000, US small cap
SPY +7.2% S&P 500 US large cap

TLT -4.6% US 20-year Treasuries
GLD - 9.3% gold

EEM -10.4% emerging markets equities
SLV -12.9% silver

My account +10.8%. So I gave a little back this month, but am still having a decent year. It is telling that the US stock market is going up almost alone. Many foreign markets are in correction mode, some even in bear markets.

I confess to getting nervous on expiration Friday as many stocks moved lower in the morning. After the recent big losses, I took profits instead of waiting it out on expiration day.

Rule #1 remains: Live to trade another day.

Sometimes that translates into reducing risk after taking some big hits. Reversion to the mean often works, but when it fails, and there is a trending move, those whopper losers can zap an account. I took another 20x loss in sold Chipotle calls, only to see CMG whipsaw back down the next day on a food scare. Markets can be perverse like that.

I plan to be moving soon, so while I will try to keep the blog up to date, posts may be spotty, late perhaps abbreviated. I have yet to meet the person that enjoys moving. Cheers.

Weekly: Losers CMG FB TSLA

I take big losses in Chipotle, Facebook and Tesla. It is a painful week. Every day seems to bring another hit. I am down about 1.1% 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 Sell TSLA Sep 435 c 87
Sell SYY Nov 60 p 21 new long

Wed A really bad day for me, down almost 2%. Chipotle rallies and the rest of the market sells off. I close one CMG leg for a 20x loss. I reduce risk by closing a few trades for profit
Cover CMG Sep 520 c 2180 about a 2000% loss

These are all closed for profit
Cover GOOGL 1300 c 05
Cover FB Sep 155 p 54

Cover QQQ Sep 160 p 54
Cover SPY Sep7 261 p 53
Cover BA Aug 320 p 56

Sell CMG Sep 610 c 210
Sell NFLX Sep 405 c 31
Sell GOOGL Sep 1390 c 105

Thu New long in Walmart on earnings news. Chipotle falls on food news. Facebook declines triggering my mental stop loss on one leg. I end the day with a gain +0.5%.

Roll CMG: Cover CMG Sep 610 c 160 for profit
Sell CMG Sep 620 c 100 cover after news same day 45 for profit

Sell WMT Sep 90 p 20
Sell COST Sep 200 p 40

Sell JPM Sep 105 p 23
Sell PYPL Sep 75 p 23

Chipotle lower after food news
Cover CMG Sep 435 p 215 for profit
Sell CMG Sep 600 c 90

Facebook lower, triggering my mental stop level
Cover FB Aug 175 p 151 for big loss

Roll: Cover FB Sep 220 c 05 profit
Sell FB Sep 205 c 17

Fri I get nervous in the morning, and close out a bunch of trades for profit. Telsa tumbles on news.

Cover TSLA Aug 295 p 118 for profit
Cover TSLA Sep 200 p 315 for profit
Cover GOOGL 1185 p 30 profit

Cover NFLX Aug 310 p 57 breakeven
Cover FB Sep 145 p 33 profit

Sell TSLA Aug31 425 c 24

Tesla and Turkey

Tesla and Turkey dominate the news. TSLA CEO Elon Musk tweets that the company may go private at $420 a share. The stock booms higher. On Friday, news from Turkey sent the entire market lower. I escape with tiny gains for the week.

I plan to move soon, so updates may be delayed and/or abbreviated. Thank you to all the dedicated readers.

Mon Upside bias continues. AMZN BRKB CMG FB are among stocks moving up this morning.

Sell CMG Aug 430 p 45
Sell AMZN Sep 1550 p 339

Sell SPY Sep14 267 p 64
Sell QQQ Sep14 165 p 56

Sell NFLX Sep 275 p 53
Sell IWM Sep14 153 p 44

Sell FB Sep 165 p 98
Sell BRKB Sep 190 p 43

Cover FB Aug 200 c 24 for profit
Cover FB Sep 215 c 35 for profit

Tue Elon Musk threatens to take Tesla private at $420, causing a massive short squeeze.

Sell GOOGL Sep 1150 p 480
Sell FB Aug 175 p 25

Sell TSLA Sep 270 p 178

Wed Roll CMG 175 credit: Cover CMG Sep 395 p for profit
Sell CMG Sep 435 p 238

Sell TSLA Sep 450 c 117

Sell SPY Sep 268 p 75

Sell QQQ Sep 168 p 64

Fri Cover SPY Sep 263 p 75 for profit
Sell FB Sep 210 c 28

Weekly: Whipsaw on FB

I get whipsawed on Facebook as it breaks 170 to the downside on Monday. I cover, then it rebounds to close the week around 178. These things happen. The good news is a profitable week, after a rough two week while I was away. As for the rest of the week, I make adjustments as stocks move around. Tesla booms higher after its earnings. Chipotle has another food scare then recovers.

Mon Facebook moves lower again. I take some profits and a couple of big losses.

Cover FB 170 p 480 big loss
Cover FB Sep 170 p 720 big loss

Cover QQQ Aug 163 p 47 profit
Cover QQQ Aug24 163 p 73 profit

Cover SPY Sep 255 p 88 profit
Cover TSLA Aug 225 p 263 profit

Cover SPY Aug24 260 p 41 profit
Sell GOOGL Aug 1330 c 202

Sell SPY Aug31 292 c 19
Sell NFLX Aug 395 c 47

Sell GRUB Aug 145 c 25
Sell FB Sep 135 p 25

Tue Chipotle has another food scare.
Sell CMG Sep 520 c 112

Wed Apple up on earnings, close to $1 trillion market cap.
Cover FB Sep 205 c 46 profit
Sell AAPL Sep 170 p 31

Thu Tesla booms higher. The DJIA moves lower in the morning, then rallies off its lows.

Roll GOOGL155 credit Cover GOOGL Aug 1330 c 79 profit
Sell GOOGL Aug 1300 c 234

Sell QQQ Sep 160 p 64
Sell SPY Sep7 261 p 58

Sell TSLA Aug 295 p 141

Fri Sell FB Sep 155 p 72
Sell CMG Sep 410 p 225