My
AMZN disaster might not be what you are thinking. After the earnings news was
out, I got over confident, and legged into sold strangles on AMZN
JulW4 540 puts and 590 calls. I bought back the put leg for about a
750% loss as AMZN fell. Yikes! The rest of the week was also bad,
with the overall stock market suffering big losses for the week. I
don't track it closely, but I believe this is my worst week of the
year.
Other
highlights include selling strangles on GLD, GPRO, TSO and a quick
profit on SWKS after earnings.
Here
are the trades: (p = puts, c = calls, third week expiration unless
noted)
Fri
Sell AMZN JulW4 540 p @567.0 One-day long position in Amazon.
AMZN gaps higher on earnings. This is near the 10% probability line
and 550 is support from the overnight trade. If it gets threatened I
will roll down and out. ShadowTrader just said AMZN had a 2.5
standard deviation move (about 2% or 3% probability) and call sellers
and short sellers were crushed by the gap. After 15 minutes I am down
100% as AMZN dips below 560.
Half an hour after my first trade I sell
some calls to hedge: JulW4 590 c. 560 looks to be the neighborhood
for now, but markets have a way of frustrating people.
Yeouch!
Mid-day I cover AMZN JulW4 540 p @539.0 365 I take a 750% loss on
these sold puts! I got over confident, a bit too big for my britches
and paid for it.
Sell
HON Aug 105 p @103.4 Rebalance in Honeywell as it drifts lower.
Earnings were out last week and the follow through has been to the
downside.
Cover
SWKS Aug 80 p @98.6. I close my position in Skyworks Solutions for a 45% gain. I don't like the tape action and overall market after
earnings.
Thu
Sell AMBA Aug 105 p @126.9 Rebalance Ambarella as it continues to
rally, up another 4 points this morning. Looks like it wants to take
out the old high around 128 to get some short sellers to cover. Well,
I am the one that got head faked as AMBA drops a point in the two
minutes it takes for me to type this.
Sell
AAPL Aug 115 p @126.6 Rebalance in Apple as it drifts higher. For
now, my bearish stance is wrong.
Wed
Sell GLD Aug 111 c @104.5 Rebalance in gold as it moves lower.
Sell
AAPL Aug 135 c @124.1 New short position in Apple. Talking heads on
TV and a lead story on Marketwatch seem far too happy about buying
this dip. The recent high was around 134. Later in the day, I hedge
as the sold calls by selling some puts: Aug 108 p @124.8. So the
position is sold Aug 108/135 strangles.
Sell
SWKS Aug 80 p @99.4 New long position in Skyworks Solutions. SWKS
is a supplier to Apple and is down on that news. SWKS reports
earnings after the close today, and I am looking for a rebound. If
there is bad news, some of it is baked in by today's sympathetic
decline.
Sell
AMBA Aug 100 p @122.4 Rebalance Ambarella as the rally rolls on.
Sell
JPM Aug 67.5 p @70.3 Rebalance JP Morgan Chase as it moves to a new
52-week high.
Tue
Sell TSO Aug 120 c @98.0 30 As Tesoro moves lower, I hedge the sold
puts by selling some calls.
Sell
GPRO JulW4 strangles @60.1. I sell some weekly GoPro strangles ahead
of earnings. I am going way out on the wings. My thinking is that
there have been some recent big movers on earnings (GOOG NFLX IBM) so
some premium sellers are either gun shy or lost big on some of these
movers. I looking for about a 10% move on the news. My strikes are at
20% lower and 30% higher, which I see as a large margin of safety.
Mon
Sell AMBA Aug 92.5 p @117.0 Rebalance in Ambarella as it moves
higher. The AMBA bulls seem to be back in charge.
Sell
SPY AugW1 203.5 p @212.4 Rebalance in S&P 500 by selling some
August weeklies. These are around the 10% probability line, and the
recent low was around 204.
Sell
DIS Aug 110 p @119.7 Rebalance in Disney as the rally rolls on. I
have a complicated position, net long.
Sell
TSO Aug 85 p @100.2 New long position in Tesoro. Chart shows a nice
break out from 94.
Sell
GLD strangles @106.1 Aug 95 p / Aug 111 c
Selling strangles is a bet on a trading range.
This one skews bearish. It's been a long time since I traded gold.
Chart pattern is a break down of major support, with resistance at
110. On the downside 95 on GLD translates roughly to $1000 on
physical gold, which I see as psychological support. It is a small
fish trade, not much premium. However, I often add sell more layers
as the underlying moves.
Sell
SKX Aug 110 p @124.0 Rebalance in Sketchers as it continues to move
higher.
Position
Summary:
net
neutral IBB TSO
net
long AAPL AMBA DIS HON IWM JPM NFLX SPY
net
short GLD
long
BRKB EBAY NKE UA ULTA WBA
closed/expired
AMZN GPRO SWKS
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