Monthly: 115 – 10 Grade B, chasing the AMZN butterfly

I count 115 winners 10 losers for the April option cycle. Self grade is B. I am up about 2% for the month. I took on more risk to get that gain, and took some big losses.

My Amazon adventure started innocently, a low risk butterfly out to June. AMZN moved up the next day, and the next. I sold some puts to get back the cost of the butterfly. A few Trump tweets later, I was down like 500% on those legs. I spent the rest of the month rebalancing, doing a few day trades. It all worked out, though I took on a lot of tail risk. AMZN is an expensive underlying. So selling multiple layers of options naked means a large tail risk, if there is a market melt down or melt up. It worked out for me this time. I also profited on FB and in a small way on NFLX.

Some etfs that I track, year to date, best to worst:

GLD +2.4%
IWM +2.1%

SLV +0.9%
EEM +0.3%

SPY +0.2%
TLT -6.6%

My account is up 2.6%, so things are looking up. Hard to say which way the market wants to go. Just when I think the bull is back, the bears come back in. If I knew, I wouldn’t have to hedge, I could trade directionally.

Weekly: up then down

I am up for the week. The declines on Thursday and Friday, made it feel like a sour week. I takes some more losses. I profit in a small way from NFLX 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):

Mon Rally back on track after Syria attacks. It gets a little too hot and I close two legs for losses. Despite the losses, I am up a decent amount for the day. Astrology fans, Mercury is back to direct (was retrograde). For believers, the retrograde period brings higher chances of miscommunication, mechanical and electrical problems.

Cover COST Apr 195 c 188 for loss
Cover ULTA Apr 230 c 265 for loss

Sell IWM May 144 p 56

Sell JPM May 95 p 20
Sell QQQ Jun 140 p 86

Sell SPY MayW1 253 p 57
Sell AAPL May 155 p 68

Sell COST May 175 p 57
Sell SPY MayW2 252 p 70

Sell COST May 210 c 30
Sell ULTA May 255 c 80

Sell NFLX strangle: Sell NFLX Apr 250 p 45
Sell NFLX Apr 370 c 48

Tue Rally continues. I am up 0.63% today. Nice gain for one day, but lags SPY which is up +1.07%, and QQQ +2.16%. I do tend to lag during trending up moves.
Sell SPY MayW1 256 p
Sell QQQ MayW2 152 p 52

Sell SPY May 252 p 74
Sell UNH May 210 p 43 earnings

Sell SPY Apr 263 p 16
Sell ULTA May 205 p 75

I take some risk off by closing some sold calls for a profit.
Cover SPY May 280 c 70 for tiny profit
Cover NFLX Apr 370 c 17 for profit

Cover AMZN May 1700 c 570 for profit
Cover QQQ Apr 169 c 18 for profit

Wed A quiet day. I roll some positions, close some others.
All these are closed for profit:
Cover SPY Apr 252 p 04

Cover QQQ May 145 p 30
Cover AAPL May 150 p 29

Cover AMZN Apr 1600 c 66
Cover IWM May 141 p 23

Sell SPY May 254 p 74
Sell QQQ May 152 p 61

Sell AAPL AprW4 170 p 29
Sell IWM May 148 p 47

Thu Amazon up after publishing Prime subscriber numbers. Apple down on news.

Sell AAPL AprW4 182.5 c 16
Sell AMZN May 1250 p 335

Cover QQQ May 150 p 59 for profit
Cover SPY May 247 p 64 for profit

Fri Apple continues to decline. I close one leg for a big loss.
Cover AAPL AprW4 170 p 262 for loss
Cover SPY MayW1 253 p 51 for profit

Cover SPY May 250 p 84 for profit
Sell AAPL May 185 c 68

Weekly: very very good to me

I enjoy a very good week, up around 5% in round numbers. I am now up about 1% for the year. That may sound like crap, but after being down over 10% a couple of times, getting back to break even is something to be thankful for. The major indexes are up this week with QQQ leading the way with a 2.8% gain.

My winners for 2018 include AMZN NFLX NVDA AAPL.
Losers include SPY BRKB UNH MMM.

Again, I am mostly selling strangles.

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 then fades. A 400 point Dow gain shrinks to about 40 by the close. I sold some puts near the highs :( Almost all these are red by the close.

Sell MU Apr 43 p 23
Sell SPY AprW2 252 p 38

Sell AMZN Apr 1250 p 240
Sell QQQ AprW4 145 p 49

Sell SPY AprW4 245 p 57
Sell AAPL May 150 p 94

Tue Those 400 Dow points lost late Monday, are made back, as China’s leader drops hints about a possible trade deal (vs. tariffs and a possible trade war) and Mark Zuckerburg Facebook CEO, testifies for Congress. I rebalance by selling more layers of puts.

Sell SPY May 240 p 105
Sell BA Apr 307.5 p 112

Sell FB Apr 145 p 39
Sell TSLA Apr 245 p 63

Sell ULTA May 190 p 90
Sell QQQ Apr 151 p 45

Sell MU May 40 p 40
Sell SPY MayW1 247.5 p 97

Sell FB Apr 150 p 49
Sell WYNN May 150 p 101

Wed Sell FB AprW4 148 p 90

Thu Sell IWM MayW1 145 42
Sell QQQ MayW2 147 p 66
Sell QQQ MayW1 147 p 53

Sell SPY May 247 p 112
Sell SPY MayW2 245 p 80

Sell BA Jun 280 p 279
Sell MU Apr 47 p 15

Fri Stock market rallies in the morning then fades into the red. I add some delta in the morning, and these new positions are in the red by the close.

Sell SPY AprW4 254 p 53
Sell QQQ AprW4 153 p 44

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