Weekly: A wild tariff ride

It is a wild ride, fueled by tariff news and interpretations. The major indices close down for the week:

DIA -0.7%, SPY -1.4%, QQQ -2.1%

My account is up a tiny amount +0.1%. It is a great week for hindsight traders, braggarts and liars. If a genie gave an options trader this weeks tick chart ahead of time, he/she could have made huge money. Unfortunately my life doesn’t currently include a magic genie. I muddled through. 

Mon Another down day
I lose about 4.5% today. I close out several legs for a loss as my mental stop levels are breached.

These are the four legs covered today for losses in the 350% to 600% range
Cover IBB Apr 103 p 285 for loss
Cover SPY Apr 257 p 526 for loss
Cover QQQ AprW1 155 p 311 for loss
Cover QQQ Apr 155 p 463 for loss

Sell AMZN Apr 1600 c 380
Sell QQQ Apr 169 c 34

Sell SPY Apr 273 c 40
Sell AMZN May 1800 c 295

Sell TSLA Apr 150 p 90
Sell QQQ May 172 c 57

Sell SPY May 277 c 67
Sell CMG Apr 360 c 52

Sell AAPL May 190 c
Sell AMZN Apr 1550 c 505

Tue On Monday, SPY touched the 200 day moving average. We bounce today. I mangle some Amazon trades. The results are okay, but could have been so much better. After all the dust, I about break even on Amazon trades for 2018. Considering how volatile the stock has been, and how badly I have traded it, it feels like a minor miracle. By the close, my account is up 3.8% for the day (after -4.5% on Monday).

Sell AMZN Apr 1575 c 370
Sell AMZN May 1700 c 685

Sell AMZN May 1000 p 490

Cover AMZN Apr 1600 c 325 for gain
Cover AMZN Apr 1575 c 305 for day trade gain

Wed Another crazy day, as the market gaps down at the open then rallies most of the day. Will we get a follow through up day? Or more crazy making?

Sell AMZN Apr 1600 c 120
Sell BA Apr 350 c 99

Sell BA May 250 p 113
Sell AMZN Apr 1000 p 60

Sell AAPL May 145 p 83
Sell SPY May 235 p 100

Sell QQQ May 135 p 54
Sell TSLA Apr 200 p 60

Cover AMZN Apr 1550 c 405 for gain
Cover AMZN May 1750 c 380 for gain

Thu Rally has legs. Third up day in a row for the first time in a month. I adjust several positions, selling new layers of puts, covering some calls, all for profit.

Sell SPY May 242 p 140
Sell QQQ May 142 p 101

Sell BA May 285 p 278
Sell BRKB May 180 p 115

Sell AMZN Apr 1200 p 199

Cover AAPL Apr 182.5 c 54 for profit
Cover BA Apr 360 c 99 for profit
Cover SPY May 285 c 39 for profit

Fri Another hard down day. The open is modestly lower then the selling picks up steam. The market does come off the worst levels. I cover two legs for a profit, to reduce long delta, reduce risk.

Cover QQQ Apr 143 p 43 for profit
Cover SPY Apr 245 p 103 for profit near worst levels of the day :(

Weekly: The rabbit hole called AMZN

I feel like Alice in Wonderland as I venture down the rabbit hole of Amazon. I came into the week with a butterfly, a near delta neutral position with limited risk. On Monday, I sold some AMZN puts naked. I spent the rest of the week doing damage control, suffering terrible draw downs. The selling of puts, even though high probability, weren’t a wise move. Not with the markets so crazy.

By the end of the week, I am up 3%, I’d say it was mostly luck. I closed some legs on various stocks, for losers as the market gyrated up, down and all around.

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 Markets rally as trade tensions ease. I scramble to stay long.
Sell BRKB May 175 p 129
Sell TSLA Apr 350 c 125

Sell INTC Apr 46 p 24
Sell AMZN Apr 1200 p 270

Sell CAT Apr 120 p 32
Sell BRKB Apr 180 p 62

Sell AAPL Apr 150 p 38
Sell SPY May 230 p 107

Sell QQQ May 140 p 85
Sell IWM May 130 p 54

Sell AMZN May 1250 p 1160

Tue A demoralizing day for me. The Monday rally turned out to be a massive head fake, especially for some tech stocks. I lose virtually all of Monday’s gains. The big losers include: Tesla, Amazon, Nvidia, QQQ. I add delta on Apple, Boeing, cover some calls on Berkshire, then the market turns sour.

Cover BRKB Apr 200 c for gain, but it was part of a complex position
Sell AAPL Apr 160 p 88

Sell BA May 270 p 235
Sell AMZN Apr 1750 c 190

Sell AMZN Apr 1700 c 380
Sell NVDA Apr 260 c 108

Sell NFLX AprW1 340 c 51
Sell QQQ May 175 c 54

Sell INTC Apr 57 c 16
Sell IWM May 164 c 40

Sell BA Apr 360 c 120
Cover TLSA MarW5 285 p 1069 for loss

Wed Down the rabbit hole I go. Declines in AMZN, NFLX and others leads to another bad day. I finish down 1.9%. Yikes.

Sell AMZN Apr 1600 c
Sell AMZN May 1750 c 1085

Cover QQQ Apr 158 p 481 for loss

Thu A relief rally before the market holiday on Good Friday. I am up 4.7% for the day. I end the week up about 3% for the week. Still down about 4% for 2018.

Sell AMZN Apr 1600 c 765
Sell COST May 170 p 114

Sell FB Apr 135 p 49
Sell NVDA Apr 180 p 37

Cover AMZN Apr 1600 c 550 for profit
Cover AMZN Apr 1600 c 690 for profit

Weekly: FFFF Facebook, Fed, fade and F

Down 7% for me this week. Whack, whack, whack. Hermosa Beach, CA residents may remember a bar that went by the acronym FFFF (Fat Face Fenners Falloon). This stock market week started with Facebook, then the Fed, then the huge fade on Thursday and Friday. Use your imagination for additional F’s.

Gamma did me in, as delta expanded on the sharp decline. Friday’s decline caught me by surprise. I thought we might get a balancing day, but down we went. After poking my head above break even for the year, down 7% for a week is horrible. I didn’t do anything incredibly stupid. However, being long and wrong, with volatility expanding, and it ended up as a very bad week.

Astrology fans can take note that Mercury went retrograde on 3/22/18 Thursday, and goes back to direct on 4/15/18.

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 Facebook gaps lower on news
Sell QQQ May 184 c 33
Sell QQQ Apr 180 c 18

Sell SPY May 290 c 39
Sell FB Apr 195 c 40

Sell TSLA MarW5 350 c 60
Sell IWM May 168 c 34

Sell BRKB Apr 220 c 36

Wed FedEx up after earnings
Sell FDX Apr 230 p 89
Sell FDX Apr 280 c 40

Sell FB Apr 125 p 19
Sell FB Apr 195 c 20

Sell ULTA Apr 190 p 65
Sell CMG Apr 290 p 70

Sell SPG May 130 p 62

AMZN butterfly June 1450/1400/1350 puts for debit
Buy AMZN Jun 1350 p 2309
Sell 2x AMZN Jun 1400 p 3218 each
Buy AMZN Jun 1450 p 4430

Thu Crunch. Market gap down, then close near their lows. SPY down about 2.5% for the day. Gamma bites me and I am down 4.2% for the day. Yikes. Nothing got stopped out, but a whole lot of pain. The new positions from Wed, especially FDX are deep in the red. I sell some calls but the small premiums are almost nothing compared to the decline.

Sell SPY Apr 281 c 37
Sell QQQ Apr 176 c 23

Sell FDX Apr 265 c 69
Sell BRKB Apr 215 c 57

Sell FB Apr 190 c 42
Sell AAPL Apr 185 c 43

Sell QQQ May 180 c 42
Sell BA May 385 c 193

Sell BA Apr 365 c 105
Sell SPY May 285 c 49

Sell CAT Apr 165 c 52

Fri Market opens flat then tumbles into the close. Another day at the whipping post for me, down another 3%. Astrology fans might take note that Mercury went retrograde yesterday. SPY down 5% since then. My account down 7%. Mercury goes direct 4-15-2018. Not sure if I can stand another couple of weeks of this. I cover three legs for losses, sticking to my stop loss levels. These are ball buster losses 600% to 1000%. Especially FDX which I just sold to open two days ago.

Sell ULTA Apr 230 c 62
Sell IWM Apr 161 c 32

Sell BRKB May 210 c 191
Sell BRKB shares for 193.64 per for gain

Sell AAPL 182.5 c 57
Sell SPY Apr 275 c 52

Sell QQQ Apr 172 c 37
Sell BRKB Apr 175 p 100

SPY backratio for small credit: Buy SPY Jun 250 p 644
Sell 2x SPY Jun 235 p 361 each
Sell SPY Jun 282 c 85

Sell CAT Apr 110 p 24
Sell COST Apr 195 c 51

Sell FB Apr 185 c 43

Monthly: back to black, 63 – 8 grade C+

I count 63 winners, 8 losers for the March option cycle. I am back to positive for the year. So happy St. Patrick’s Day to celebrate my poke into green territory for 2018. SPY is up more than I am, but gains are better than losses.

One slight adjustment I decided upon was to go further out in time for rebalancing adjustments. This helps during see-saw markets. Shorter term adjustments can be better during trending markets, because I would make more of them. Grade is C+, because I have a lot of room for improvement.

Here are a few etfs I track (best to worst):
EEM +4.4% Emerging markets equity
IWM +3.5% US small cap Russell 2000

SPY +3.1% US large cap SP500
GLD +0.8% gold

SLV -3.8% silver
TLT -5.6% US 20 year Treasury bonds

My trading account up a few dollars, 0.0% percent when using the formula. So I am lagging buy and hold for 2018, but it is a lot better than behind the 8-ball and being down 5% or 10% for the year. The year is full of woulda coulda shoulda moments. Trading is so easy in hindsight, but few do so well in real time. Yes, there are a handful of unicorns with remarkable talent and/or luck. For average folks, average returns, average losses are what most of us experience.

One story to share is that the wild market swings of February led to insomnia. During one sleepless night, someone on the radio was extolling the benefits of meditation. Since that time, I have been meditating maybe five minutes a day. It seems to be helping. I use a fitness watch to track my sleep. Since I started meditating I’ve had more deep sleep, higher quality sleep. As always YMMV, but so far my experience with meditation has been a positive one. Like so many people, I had difficulty doing it, but like so many things in life, a little effort goes a long way.

Weekly: Whipsaw

I close out three legs during the week for a loss. In all three cases it was near the worse levels and the underlying reversed. The markets settled a bit. I made money, but obviously would have made more had I waited until end of day before honoring the stop stop levels.

The good news, is that I now ever so slightly in the green for the year. I am still lagging buy and hold of SPY, but green is a whole lot better than the draw down levels I saw earlier in the year.

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 SPY AprW1 262 p 75
Sell IWM May 141 p 87
Sell QQQ Apr 158 p 71

Tue Whipsaw. Market opens higher than moves lower. I cover two call legs near the day’s highs, only to see the market reverse lower. After the bull has left the barn, I sell some calls to rebalance my deltas.

Cover QQQ Mar 175 c 129 for a 500% loss
Cover SPY Mar 280 c 140 for a 400% loss

Also near the highs I roll BRKB covered calls:
Cover BRKB Mar 200 c 1230 for profit
Sell BRKB Apr 200 c 1400

After the bull has left the barn I sell some calls. Whack-a-mole, and I am the mole today.
Sell SPY May 295 c 51

Sell QQQ May 190 c 23
Sell BA Apr 390 c 77

Sell NFLX AprW1 375 c 63
Sell VIX Apr 50 c 15

Wed It is Ground Hog day for me in Boeing. Stops are run, I cover one leg for a huge loss, stock rebounds. It reminds me of Charlie Brown, Lucy Van Pelt from the Peanuts. Lucy puts out the football for Charlie to kick and always pulls it away as he runs up.

Cover BA Mar 325 p 565 for 1000% loss
Sell BA Apr 265 p 99

Sell BA AprW1 375 c 61
Sell BA Apr 380 c 113

Fri Sell TSLA MarW5 285 p 143

Weekly: Goldilocks plus 5

A good week for the bulls. SPY up 3.5% for the week. My account up about 4.1%. I am still down a tiny bit for the year, so I have more work to do. Overall, the week was a huge disappointment for stock market bears. The resignation of a top Trump advisor had the bears licking their chops, but the decline was shallow and short. A booming melt up rally on Friday, fried many bears. I took a loss on one leg of sold calls, and many others are deep in the red. I kept adding long delta, by selling way out of the money puts.

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 Market opens lower, then rallies.
Sell BA Apr 400 c 100
Sell NFLR Mar 260 p 59

Sell COST Mar 172.5 p 52 ahead of earnings
Sell QQQ Apr 149 p 77

Sell SPY Apr 247 p 128
Sell BA Apr 300 p 196

Sell TSLA MarW4 275 p 71
Sell SPY Mar 257 p 43

Tue Sell NFLX Mar 280 p 93
Sell COST MarW1 177.5 p 41 add

Sell NFLX AprW1 275 p 244
Sell QQQ May 145 p 103

Sell SPY May 238 p 144
Sell IWM May 135 p 90

Wed Trump economic advisor resigns. U.S. markets gap down at the open. SPY closes unchanged for the day, a huge disappointment for the bears.

Sell ADSK Mar 120 p 31 Autodesk higher on earnings.

Thu Costco slightly lower after earnings. WYNN up after an analyst meeting.

Sell COST Mar 195 c 15
Sell IBB Apr 100 p 50

Sell WMT Apr 97.5 c 27
Sell WYNN Apr 140 p 64

Sell WYNN Mar 160 p 22
Sell MCD Apr 175 c 16

Fri A jobs report, detente with North Korea, spark a massive stock market rally. I cover one sold call leg for a loss, and add long delta through out the day.

Cover QQQ Mar 172 c 145 for loss
Sell NVDA Apr 200 p 124

Sell AAPL Apr 155 p 43
Sell NFLX Mar 300 p 100

Sell BRKB Apr 195 p 101
Sell IWM Apr 145 p 62

Sell QQQ May 250 p 144
Sell IBB Apr 103 p 51

Sell BRKB Jun 185 p 143
Sell NFLX MarW4 295 p 104

Sell COST Apr 170 p 67
Sell SPY Apr 257 p 93

Sell WYNN Apr 160 p 143
Sell SPY Apr 252 p 96

Sell SPY May 250 p 144
Sell QQQ Apr 155 p 77

Weekly: Down again

I lose about 2.5% for the week. Now down about 5% for the year. I bite on Monday’s rally. Really a rough 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. I continue to add long positions.
Sell QQQ Mar 158 p 41
Sell SPY MarW2 264 p 44

Sell QQQ MarW4 155 p 44
Sell BRKB Apr 190 p 101

Sell BA MarW5 310 p 95

Sell SPY MarW1 269 p 16
Sell SPY MarW2 266 p 42

Sell BRKB Mar 195 p 30
Sell SPY Mar 262 p 55

Sell QQQ AprW1 155 p 68
Sell NFLX MarW4 250 p 128

Sell DIS Mar 100 p 15
Sell CAT MarW5 145 p 54

Sell UNH Apr 190 p 51
Sell WMT Apr 80 p 23

Sell AAPL MarW5 160 p 38
Sell IBB Apr 93 p 31

Sell SPY AprW1 250 p 67
Sell QQQ MarW2 160 p 23

Sell SPY MarW4 268 p 52
Sell IWM MarW5 142 p 39

Tue Revenge of the bears, as markets close near the lows.
Sell DIS Mar 113 c 13
Sell AAPL MarW5 200 c 19

Sell SPY MarW2 285 c 15
Sell QQQ MarW2 175 c 18

Sell TGT Apr 90 c 24

Wed See-saw market goes back to the bears. I get suckered into the morning rally, making for a frustrating day.

Sell CAT MarW5 180 c 15

Sell BA AprW1 300 p 70
Sell BA Mar 325 p 56

Sell BRKB Mar 200 p 52
Sell SPY Mar 285 c 17

Sell IWM Apr 165 c 181

Thu Yikes! Markets move lower after new tariffs are announced. I close out two legs for big losses. Stop level is the strike price. Not a time to fool around. SPY down about 1.5% today, my account more like 2.5%. Ouch.

Cover SPY MarW1 269 p 205 for loss
Cover SPY MarW2 268 p 354 for loss

Sell WMT Apr 100 c 28
Sell SPY Apr 290 c 33

Sell SPY MarW2 280 c 15
Sell IBB Apr 118 c 45

Sell SPY Apr 285 c 68
Sell CAT Mar 165 c 50

Sell BRKB Apr 220 c 122
Sell QQQ Mar 175 c 20

Sell SPY Mar 280 c 26
Sell DIS Mar 109 c 18

Fri TGIF at least at the close. At the open it was more red ink. I finish down about 2.5% for the week. Ouch.

I cover more legs for losses, mechanically following my mental stops. Again, not a time to be fooling around, playing hunches. Rules are in place to protect the overall account. Rule #1 is to live to trade another day.

Cover BRKB Mar 200 p 395 for loss
Cover SPY MarW2 266 p 388 for loss

Sell BA Mar 385 c 54
Sell CAT MarW4 170 c 30
Sell MCD Apr 120 p 26

Weekly: Tug-o-war

Intraday swings are frequent during the short week. The bulls win the tug-o-war with a hard pull on Friday. I close one leg of sold calls on QQQ for a loss. Like the major indexes, my account is up a small amount 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 Sell DIS Mar 115 c 16
Sell WMT strangles Sell WMT Mar 85 p 18
Sell WMT Mar 105 c 22

Wed Markets turn lower after the release of Fed minutes. Unfortunately, I add some long delta before the turn. Walmart continues lower. I add layers and pivot to net short.

Sell QQQ MarW2 155 p 50
Sell QQQ MarW1 158 p 36

Sell WMT Apr 75 p 20
Sell WMT Apr 105 c 40
Sell WMT Mar 100 c 24

Sell IWM Apr 135 p 65
Sell SPY MarW2 257 p 65

Sell NFLX Mar 240 p 67
Sell TLSA MarW1 300 p 51

Thu Tug-o-war continues as market opens strong, then fades. ROKU down on earnings.
Sell ROKU strangles: Sell ROKU Mar 30 p 17
Sell ROKU Mar 58 c 15

Sell WMT Mar 86 p 19
Sell NVDA Mar 290 c 23

Sell QQQ MarW4 149 p 51
Sell JPM Mar 104 p 21

Fri Bulls win the week with a big pull. I add long delta, close out one sold call leg for a big loss. New legs tend to be way out of the money, as I am wary of another leg down.

Cover QQQ MarW1 167.5 c 163 for a 330% loss
Sell SPG Apr 130 p 58

Sell QQQ Apr 182 c 19
Sell QQQ MarW4 145 p 33

Sell CAT strangles: Sell CAT Mar 143 p 32
Sell CAT Mar 177.5 c 13

Sell JPM Apr 95 p 27

Sell NVDA strangles: Sell NVDA MarW4 207.5 p 70
Sell NVDA MarW4 300 c 19

Sell SPY MarW4 245 p 55
Sell AAPL MarW4 155 p 25

Sell RTN Apr 185 p 51
Sell TGT Apr 60 p 32

Sell BA MarW4 300 p 65
Sell IBB Apr 89 p 26

Monthly: Big W, 104-23 grade C-

I count 104 winners, 23 losers for the February option cycle. There is an old movie Mad, Mad, Mad World where they are looking for the Big W. The SPY chart looked like a big W as it made a double bottom. I sold too much premium when volatility was low, and paid for it when vol exploded.

I followed my trading rules and covered as the underlyings moved through the strike price. The losses were large. My stress level was high.

Here are a few etfs and the 2018 results:

EEM +5.1% Emerging market equity
GLD +3.5% gold

SPY +2.7% S&P 500 U.S. large cap
IWM +0.6% Russell 2000 U.S. small cap

SLV -1.6% silver
TLT -6.4% U.S. 20 year treasuries

My account -2.4%, so not good. That said, it could have been a lot worse. With the explosion in volatility more than a few accounts were wiped out. Going forward, I will remain humble, hopefully having learned something from the market turmoil.

Weekly: Bulls are back in town

The bulls reign supreme this week with six straight up days for SPY (five this week). My trading account recovers off the lows, but is down over 3% for 2018. As almost always, could have been better, could have been worse. Mostly, I added long delta all week, trying to stay delta positive on QQQ and SPY. One call leg on QQQ was closed for a loser, the rest came in.

Looks like big money at work. Small money tends not to move the markets so quickly. What next? I don’t know. I’ll try to stay on the correct side of the market, but the big money elephants may spook. Even though every day closed higher, there were some intra-day swings.

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 Markets move higher. The ride is bumpy. I add more layers, all way out of the money. My account recovers, up 4.7% for the day. Now down about 5% for 2018 after Monday’s close.

Sell IBB Feb 93 p 20
Sell NVDA Feb W4 265 c 20

Sell QQQ MarW1 135 p 23
Sell QQQ Feb 149 p 18

Sell SPY MarW1 225 p 41
Sell SPY Feb 252 p 33

Sell TSLA FebW4 240 p 30
Sell TSLA Feb 350 c 20

Sell WYNN Feb 180 c 22

Tue Sell IBB Mar 88.33 p 20
Sell NVDA FebW4 195 p 25

Sell QQQ FebW4 148 p 25
Sell SPY FebW4 244 p 25

Wed Stock market gaps lower on inflation news, then rallies for a decent up day. Some bears are dazed and confused by the action. It is their turn to be frustrated. I add long delta and keep adding as the rally builds.

Sell QQQ MarW1 148 p 39
Sell SPY MarW1 239 p 31

Sell QQQ MarW2 150 p 57
Sell IWM MarW1 140 p 27

Sell QQQ Mar W4 141 p 40
Sell SPY MarW4 232.5 p 58

Sell IBB Mar 95 p 35
Sell NVDA MarW1 205 p 38

Sell NFLX FebW4 240 p 33
Sell AAPL MarW1 150 p 21

Sell TSLA Mar 240 p 68

Thu The bulls have returned, running for the fifth straight up day. I add long delta all day long. I cover one call leg for a big loss. New legs are mostly way out of the money, just in case the bears come in. Up 0.8% for the day, which under normal conditions would be a good day, but feels like not enough given how strong the markets have been. I am still down about 3% for 2018.

Sell NVDA FebW4 220 p 31
Sell QQQ FebW4 153 p 16

Sell QQQ MarW1 155 p 57
Sell SPY MarW1 155 p 51

Sell NVDA Mar 200 p 61
Sell QQQ Mar 150 p 54

Sell AAPL Mar 155 p 62
Sell IWM Mar 135 p 30

Sell BRKB Mar 180 p 46
Sell QQQ Apr 143 p 83

Sell SPY Apr 235 p 113
Sell RTN Mar 190 p 33

Sell BA MarW1 320 p 78
Cover QQQ Feb 165 c 86 for loss

Fri Sell SPY FebW4 262 p 32
Sell QQQ FebW4 157 p 18

Weekly: Hell Week

This week included, two huge down days, two up days and one balancing day result in my worst week since starting this blog. My account down about 9% for the week, down about 10% for 2018. For the most part I stayed mechanical, about taking my losses. The big Tuesday rally and strong open on Wednesday were another trap and I fell for it. Overall, a lot of red ink.

Again, I’ll repeat the signs of a market top: inverted yield curve, transports leading the market lower, popular sentiment wildly bullish. The yield curve is getting closer. The transports are falling but are more coincident than leading. Some might say that semiconductors are a better leading indicator.

I made a lot of trades, but not much helped. 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 Disaster! DJIA down 1175 points, 4.6%. SPY down 11, 4.1%. My account down about 9% at the close, then shows -11% a few minutes after as late trades shows more selling. Yikes! This is probably my worst day of trading since starting this blog about ten years ago. I make a bunch of trades, selling calls, but can not bail water fast enough. More holes appear as the market sinks.

Sell BA Feb 385 c 27
Sell SPY Mar 290 c 26

Sell BRKB Mar 220 c 146
Sell QQQ Mar 176 c 31

Sell VIX Mar 45 c 20 looks like free money, then VIX doubles from 17 to 35 by the end of the day.

Sell SPY Feb 283 c 25
Sell QQQ Feb 171 c 18

Sell TIF Feb 112 c 16
Sell RCL Feb 138 c 21

Sell AAPL Feb 175 c 19
Sell UNH Mar 250 c 117

Sell GS Feb 280 c 29
Sell MCD Feb 175 c 28

Sell MMM Feb 255 c 22
Sell JPM Feb 121 c 17

Sell IWM Feb 159 c 18
Sell RTN Feb 220 c 22

Sell ATVI Feb 83 c 17
Sell KSS Feb 70 c 25

Sell BRKB Feb 210 c 63
Sell BA Mar 395 c 98

Sell NFLX Feb 300 c 29

Several mental stop levels are breached during the day, I cover multiple legs for huge losses, ranging from -500% to 2000%. Ouch. More stops may be breached on Tuesday. This isn’t the time to get cute and try and pick bottoms. Rule #1 is to live to trade another day, and using stops is one way to do that. Other ways are defined risk, or large cash reserves.

Cover SPY Feb 272 p 384 first stop level for SPY
Cover UNH Mar 230 p 755
Cover GS Feb 255 p 815

Cover MMM Feb 235 p 720
Cover SPY Feb 265 p 670, SPY falls another 7 more points in about an hour. This is after 100 days of no more than a 2 point decline for a full day.

Tue I cover during mid-morning. I do so mechanically, unemotionally. Turns out that a strong rally into the close made these closing trades look like mistakes. It is not a mistake to follow my trading rules. Outcomes will vary. Trading by the seat-of-the-pants, has almost always resulted in poor results. Overall, I recover about 40% of Monday’s steep losses. -11% on Mon, +4.5% on Tue

Cover SPY Feb 264 780
Cover UNH Feb 220 p 670
Cover SPY Mar 263 p 1009
Cover BRKB Feb 200 p 620

Later in the day, with the rally on firm footing, I rebalance a bit and sell some further out puts on those same underlyings (in hindsight this turned out to be another mistake):
Sell SPY Feb 224 p 49
Sell SPY Mar 218 p 88

Sell BRKB Mar 170 p 50
Sell AAPL Feb 145 p 20

Sell GS Feb 220 p 24

Wed Roller coaster ride continues, SPY up early then closes lower. WYNN has a new CEO.

Sell WYNN Feb 160 p 54
Sell WYNN Mar 145 p 97

Sell SPY Feb 250 p 40
Sell SPY Mar 227 p 66

Sell NVDA Feb 185 p earnings tomorrow
Sell WYNN Mar 140 p 60

Sell UNH MarW1 200 p 71

Thu Another hard down day for stocks. The major averages are above Monday’s lows, but my account is at a new low for 2018. I lose about 8.5% today. The day starts calmly enough, then the bottom drops out again.

Sell TSLA Feb 380 c 42
Sell CAT Feb 165 c 13

Sell QQQ Mar 172 c 24
Sell IWM Mar 162 c 19

Sell SPY MarW2 281 c 31
Sell TLSA Feb 365 c 54

Sell BA Feb 365 c 52
Sell QQQ MarW2 167.5 c 40

Sell WYNN Mar 200 c 110
Sell NVDA Feb 280 c 22 just before earnings

Sell QQQ Feb 165 c 19

Five more stops get run. Losses range from 400% to 1200%
Cover CAT Feb 150 p 285
Cover LRCX Feb 165 p 490

Cover TIF Feb 100 p 197
Cover AAL 49 p 137

Cover XLU 49 p 88

Fri I cover another batch of five for big losses on the dip. As much as I want to believe in a positive turn, I follow my rule to use the strike price as a mental stop level. I sometimes give it some room, another point, a close below, but this is not a market to get cute in.

Cover MCD Feb 160 p 305
Cover IBB Mar 105 p 490

Cover QQQ Feb 154 p 326
Cover IWM Feb 145 p 260
Cover CAT Feb 145 p 425

Sell TSLA FebW4 365 c 46
Sell CAT Feb 130 p 50
Sell IBB Mar 80 p 25

Sell NVDA FebW4 185 p 49
Sell DIS Mar 80 p 21
Sell GS Feb 205 p 19

Weekly: bull is wounded but not dead

All of my 2018 gains evaporate as the market careens lower. I lose about 2.5% for the week, am now down about -0.5% for 2018.

I have often described as the bull as zombie lurching forward, seemingly impervious to slings and arrows. The bull accelerated in January and is now hurt and stumbling. Is this the end? If this were a movie, monster movies rarely end on the first damage to the monster. That is often just the first act. I believe this zombie bull will be similar, that it will get a second wind, a third wind. New highs? I think more likely, is a period of three to six months of side ways action.

Some might say the market declines like this happen once in a blue moon. Well, we had a blue moon on Jan 31. The DJIA falls an eerie 666 points. The bear market low on SPY was also 666 in 2009.

For most of the week, I stumble around. I am staggered by WYNN on Monday and then UNH, a bit dumb founded by the market action and a bad turn of luck. I close one leg for a loss on WYNN. UNH gets hit, but I am not stopped out yet. Most of what I did, didn’t seem to work. I made a lot of trades, but mostly just got a bigger hole. The activity didn’t translate into progress.

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 Wynn continues lower, I close one leg for a huge loss
Cover WYNN Feb 170 p 780 for 2500% loss
Sell WYNN Feb 200 c 41
Sell WYNN Mar 210 c 80
Sell WYNN Feb 125 p 25

Sell NFLX Feb 220 29
Sell NFLX Feb 360 c 28
Sell NFLX Feb 230 p 43

Sell UNH Mar 230 p 135
Sell LMT Feb 325 p 100

Sell MCD Feb 160 p 20
Sell CAT Feb 180 c 60

Sell GS Feb 255 p 80

Tue Sell MCD Feb 185 c 20
Sell UNH Feb 252.5 c 66

Wed Boeing up on earnings.
Sell BA Mar 300 p 81
Sell BA Feb 315 p 48

Sell IBB Mar 105 p 65
Sell IBB Mar 130 c 15

Sell SPY Feb 292 c 20
Sell SPY Mar 300 c 21

Sell ATVI Feb 62.5 p 21
Sell TSLA Feb 290 p 107

Sell MMM Feb 270 c 16
Sell GS Feb 300 c 20

Sell AAPL strangle: Sell AAPL Feb 195 c 23
Sell AAPL Feb 150 p 69

Thu Sell UNH Mar 260 c 85
Sell SPG Mar 175 c 30

Sell BA Mar 290 p 48
Sell WYNN Mar 130 p 67

Sell SPY Apr 307 c 16

Fri Markets swoon, with major averages falling 1.5 to 2.5% by the close. I take on water, but haven’t been stopped out yet. I make a bunch of trades, selling lots of out of the money calls.

Sell AAPL Feb 180 c 18
Sell UNH Feb 245 c 92

Sell BABA Feb 210 c 47

Roll BRKB for 170 credit Cover BRKB Feb 200 c 1462 for loss
Sell BRKB Mar 200 c 1632

Sell SPY Feb 289 c 14
Sell TLSA Feb 425 c 22

Sell IWM Mar 168 c 15
Sell IBB Feb 120 c 15

Sell BRKB Mar 240 c 47
Sell BABA Feb 165 p 17

Sell GS Feb 290 c 22
Sell CAT Feb 175 c 17

Sell QQQ Mar 180 c 15
Sell BRKB Feb 222.5 c 34

Sell BA Mar 420 c 41
Sell SPY Feb 287 c 16

Sell SPY Feb 286 c 25
Sell BABA Feb 207.5 c 54

Weekly: Markets gone wild

The market rally rolls on. There are a few signs of froth. These include a record turn out at the live stock market meetup. The meetup was standing room only. A few of the young guns wanted to give advice, perhaps feeling like experts after a short time of making big profits. Another red flag is near record percentages of bulls in most market sentiment surveys such as MarketVane and AAII.

Okay, a few possible times to watch. Mercury goes retrograde on March 22. Bulls moves often last 18 to 24 months. Using election day as the start, 18 months projects to May, 24 months to November. Mid-term elections often provide two weeks of market turbulence. These are dates to watch. In isolation they mean near nothing.

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 SPY Feb 264 p 38
Sell QQQ Feb 154 p 34

Sell IWM Feb 145 p 23

Sell BRKB Mar 190 p 51
Sell SPY Feb 265 p 32

Close out some bought options. These were hedges against a modest decline.
Sell-to-close SPY Apr 235 p 49 for loss
Sell-to-close QQQ Mar 150 p 53 for loss

Tue Sell NFLX Feb 215 p 54
Sell WYNN Feb 170 p 32

Wed Sell-to-close SPY Apr 255 p 106 for loss

Sell SPY Mar 263 p 77
Sell JPM Feb 108 p 28

Sell RCL Feb 120 p 45
Sell NFLX Feb 220 p 54

Sell SPG Mar 140 p 46
Sell TIF Feb 100 p 27

Thu Sell AAL strangles: Sell AAL Feb 60 c 15
Sell AAL Feb 49 p 35

Sell CAT strangles: Sell CAT Feb 182.5 c 56

Sell CAT Feb 145 p 19
Sell CAT Feb 150 p 28

Sell MMM Feb 235 p 64
Sell NOC Feb 300 p 65

Sell SBUX Feb 52.5 p 15
Sell VAR Feb 110 p 25

Fri Sell BA Mar 275 p 105
Sell IWM Mar 143 p 48

Sell RCL Feb 122 p 36
Sell SPY Feb 272 p 39

Sell TSLA strangle: Sell TSLA Feb 275 p 107
Sell TSLA Feb 405 c 95

Sell QQQ Mar 153 p 52

Sell WYNN Feb 220 c 14
Wynn hits an air pocket gapping $20 lower on news.

Monthly: Run your own race, 50-5, grade C-

I count 50 winners 5 losers for the January option cycle. The market went up like a rocket ship, leaving me behind. The grade is C-, a passing grade, but not a good one. There were some ghastly percentage losers in the 5. Some call buyers made 3000%+ on their way out of the money call buys. I was on the other side of some of those.

Year to date, my account is up 1.2%. Here are a few etfs, best to worst, for calendar 2018 (three weeks).

EEM +7.0% emerging markets equity
SPY +5.4% US large cap, SP500

IWM +4.1% US small cap Russell 2000
GLD +2.8% gold

SLV +0.3% silver
TLT -3.0% US 20 year treasury bonds
So it could be worse. I could be all in long on bonds.

The cliché that comes to mind is “run your own race.” Some readers might be marathon runners, or long distance bike riders. If the pack starts fast, or you get in with a fast group, it can be folly to try and match pace if that isn’t your plan. Option premium sellers, especially those that tend towards delta neutral strategies, are likely to suffer during sharp up, or down moves.

Rule #1 is to live to trade another day. Despite the huge unexpected up move in the market, I managed a small profit. If this is a "bad" month for me, it is going to be another good year for my account.

Weekly: more of the same

The rally rolls on, though slows a bit. One TV person said if the market kept going up this fast, it would be up 150% for the year. I struggle in strong trending markets. Delta neutral works a lot better in flat, directionless markets.


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 Finally a reversal day.
Sell BA Feb 295 p 112
Sell KSS Feb 55 p 35


Sell TIF Feb 97.5 p 45
Sell UNH Feb 210 p 50 earnings

Wed The moon shot rally resumes.
Sell FB 182.5 c 20
Sell LRCX Feb 165 p 60


Sell BA 290 p 90

Sell MU strangle: Sell MU Feb 38 p 37
Sell MU Feb 50 c 14


Sell BRKB Feb 200 p 53
Sell UNH Feb 220 p 54


Sell BA Feb 285 p 67
Sell BA 280 p 60


Cover SPY Jan 256 p 02
Cover SPY Jan 240 p 01
Cover QQQ Jan 149 p 01


Thu Sell BA Feb 450 c 22
Sell UNH Feb 260 c 23


Fri Sell SHAK Feb 37.5 p 20
Cover KSS Jan 67.5 c 10 for a tiny gain.

Weekly: close your eyes and buy

The zombie bull tramples would-be bears as the market accelerates up. I eek out a minor gain for the week. It is galling to watch the market rocket higher, and get so little. With all that, if this is as bad as it gets for me, to have tiny gains, during a terrible trading week, that isn’t all bad. Some of the more bearish, more stubborn traders suffered huge losses on the week.

Overall, not a lot worked for me this week. I made a foray into KODK and got burned, though can get out with a small profit if it doesn’t rocket up from here. I rolled BRKB and watched it continue to roar higher. I cover some positions for huge percentage losses. So far this year, the bulls feasted, All I have is a small morsel, but am thankful for that because true market bears have been completely destroyed.

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 Cover NFLX Jan 210 c 545 for a 3000% loss. Well that one hurt.
Sell NFLX Jan 235 c 19
Sell NVDA Jan 255 c 16
Tue Roll BRKB for 197 credit
Cover BRKB Jan 200 c 437 for 35% loss
Sell BRKB Feb 200 c 634

Sell BA Feb 380 c 24
Sell BA Feb 265 p 73
Wed Sell AVB Feb 155 p 35
Sell AVB Feb 180 c 45

Sell BA Jan 290 p 15
Sell SPG Feb 180 c 35

Sell KODK strangles: Sell KODK Jan 7.5 p 50
Sell KODK Jan 17.5 c 25
Thu More losses as the rally rolls on.
Cover BA Jan 325 c 465 for a 3000% loss. Ouch again
Cover KODK Jan 7.5 p 75 for a 50% loss
Cover AVB Jan 170 p 140 for 50% loss

Sell BA Feb 400 c 22
Sell BA Feb 275 p 80
Sell BA Jan 300 p 18

Sell KODK Jan 15 c 15
Fri The rally rolls on. Boeing chart looks parabolic. Facebook stumbles.
Sell BA Feb 275 p 57
Sell FB Jan 190 c 18

Sell JPM strangle Sell JPM Feb 105 p 42
Sell JPM Feb 120 c 27

Sell KSS strangle Sell KSS Jan 67.5 c 15
Sell KSS Jan 59 p 15

Don’t do anything stupid

The market roars up four days in a row, up about 2% for the week. I am left at the train station, mostly left behind by the rocket rally. The phrase that comes to mind is “don’t do anything stupid.” Meaning, don’t chase the rally, don’t ignore it either, don’t stand in front of the train. What does that leave? A few measured moves, waiting for good setups post-earnings.

Yes, we would all like to be brilliant traders, able to ride every move, but reality is not that way for me. My predictions are about like coin-flips, and I would have guessed down, if I had to guess a direction for the first week of the year. Thank goodness I didn't do that. As is, I eek out a small profit for the week and regroup for the upcoming earnings.

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 Tech stocks lead the way higher on the first day of trading in 2018.

Sell FB Sell Jan 170 p 35
Sell NFLX Jan 230 c 19
Sell NFLX Jan 182.5 p 65
Thu QQQ backratio for credit
Buy QQQ Mar 150 p 127
Sell 2x QQQ Mar 145 p 81 each

Fri The 2018 rocket launch rally continues for a fourth day. It gets uncomfortable in some calls I sold. I eek out a small gain for the week, but the opportunities were so much greater than the result.

Sell BA Jan 235 c 18
Sell FB Jan 175 p 31

Sell IWM Feb 140 p 28
Sell NFLX Jan 190 p 36

Sell NFLX Jan 190 p 38
Sell QQQ Feb 145 p 27