I
heard on the radio that the stock market had its best week in a year
(52 week period). SPY made up all of January's losses and sits near
break even for 2015. Gold and bonds had a down week, but are still
outperforming stocks for calendar 2015.
I don't track my week-to-week
progress that closely, but it was a good week for me. A few of my
short calls went into the red, but it was close to a Goldilocks
scenario, just right for my positioning. For newer readers,
understand that I tend to be a cautious trader, often taking small
positions and hedging them, so a good week for me, is going to be
like watching paint dry for the all-in river boat gambler types.
I
did a lot of rebalancing trades. I scramble to add delta by selling
puts as the market rallies. Here are the trades:
*
Sell means sell-to-open, p = puts, c = calls, all are third week
expiration
Fri
Sell GLD Mar 130 c @119.4. I rebalance short strangles on gold on the
decline. GLD had a news driven pop, but is now fading.
Sell
IWM Feb 113 p @120.1. 25. Rebalance short strangles on the Russell
2000 again, as the market nudges higher. Even with this add, I am net
short, with the short Feb 123 call leg deep in the red.
Buy
to close IWM Feb 92 p @120.0.
Buy
to close BABA Feb 105 c @86.4.
Buy
to close DIS Feb 80 p @102.0
I
close several positions for a 90%+ profit (basis premium collected),
to free up some buying power. With my recent flurry of sell to open
activity, the margin needle is in the yellow zone. I prefer keep a
decent amount of dry power to allow more flexibility. The current
situation means my typical strategy of selling to open naked puts on
some high value stocks such as BWLD or LNKD (AMZN, NFLX even worse)
might use up too much of my remaining buying power.
Thu
Sell IWM Feb 112 p @119.3. I rebalance short strangles on the Russell
2000 as the rally continues to roll.
Sell
BABA Feb 94.5 c @86.8. I rebalance short strangles on Alibaba as it
drops. A big move down on a big rally day is a bearish indication.
Sell
JWN Mar 67.5 p @79.1. I rebalance short strangles on Nordstroms by
adding a March leg.
Sell
HON Mar 92.5 p @102.2. I rebalance short strangles on Honeywell as it
rallies.
Wed
Sell DIS Mar 90 p @99.5. Add to longs on Disney as it moves higher on
earnings.
Sell
WHR Feb 190 p @213.0. Rebalance short strangles on Whirlpool as it
moves up on earnings.
Tue
I scramble to rebalance and add longs as the market continues to
rally. Many options have wide spreads and I place my orders at the
mid or one tick below mid and mostly get filled. I am mildly
surprised by the rally.
Sell
IWM Mar 103 p @118.0. Russell 2000
Sell
XOM Mar 82.5 p @91.4. Exxon Mobil
Sell
APC Mar 65 p @85.2 Anadarko Petroleum
Sell
ASH Mar 100 p @119.9. Ashland
Sell
WHR Mar 160 p @200.0. Whirlpool
Sell
HON Mar 92.5 p @100.8. Honeywell
After
that flurry of six morning trades, I make it seven with a trade late
in the day:
Sell
XOM Feb 84.5 p @92.1. More rebalancing for Exxon Mobil.
Mon
Sell UNH Feb 115 c @105.9. I rebalance short strangles on United
Healthcare. The stock moved up nicely on earnings, but has been
fading. I have a complicated net long position.
Sell
HON Mar 105 c @97.9. I hedge short puts on Honeywell by selling
calls. HON had a similar pop-and-drop on earnings.
Sell
SPY put backratio @199.3:
Buy
SPY Apr 179 p / Sell 2x Apr 174 p
This
is for a credit, delta positive, theta positive, a net long position.
If the market is up or unchanged, I get to keep the modest premium.
Max profit occurs if the market moves down to the lower strike at
expiration. If there is a crash below SPY 169, it starts to lose a
lot of money.
Sell
BABA Feb 80 p @89.3. I hedge short puts by selling calls on Alibaba.
My thinking, is if this was going to crash, the earnings report would
resulted in follow through to the downside. The trading low is in the
82 range, IPO price 68. Both those numbers are support.
Position
Summary
long
APC ASH BA BRKB GDX MMM UNP VRX WFC
net
long AMGN BABA FDX HON IWM SPY UNH
net
neutral GLD ILMN JWN WHR XOM
net
short IWM
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