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