SPX calls closed

#SPXcampaign BTC $SPX Dec 31st 2165/2190 call spreads for .20. Sold for 1.25 on Dec 4th.

Well… that escalated quickly. Didn’t…

Well… that escalated quickly. Didn’t see this one coming. A move to $42 in UVXY the next 7 days would really hurt me.

SPX after hours trading

For those that don’t know, you can trade $SPX options from 3am to 9:15am ET weekday mornings, and also from 4p to 4:15p after the market closes. You may need to contact your broker to set up this ability.

What I wasn’t sure about was Monthly expiration options, which stop trading at Thursday’s close but whose settlement price is set after Friday’s open. I just confirmed you CAN trade these until 4:15pm on Thursdays (I closed a 1-lot 1975/1950 put spread that expires in the morning for .10 at 4:05pm)

#SPXcampaign

$SVXY #ShortPuts – probably didn’t…

$SVXY #ShortPuts – probably didn’t need to spend the money but it was a big position
Bought to close 10 SVXY Dec 18 2015 45.0 Puts @ 0.05.
Sold these on 04/22/15 @ 2.95

SPX put spread

#SPXcampaign Since I had precisely zero put spreads, dipping a toe back in:
STO $SPX Jan 14th 1875/1850 put spreads for 1.25.

Added to STO SPX Jan4 2150/2165 1.55

5
Jan4 SPX 1885/1870 1.10 Now IC

The reason DUST won’t go up

I’ve been working on a Webinar for #ContangoETFs and with the discussion below on $DUST, wanted to pass along part of what I’m preparing. When you have a levered ETF, they are designed to track the DAILY move of the underlying, multiplied by 2 or 3. So if $GDX is up 1% on the day, $NUGT will be up 3% and $DUST down 3%. But then it resets next day. This creates a compound tracking error that will NOT track the underlying beyond a one-day period. In fact, it will drag both the positive & negative levered ETFs down. Here’s an example:

Let’s say the underlying and long and short 2x ETFs all start at $100. We then watch price action as the underlying swings back and forth 10%:

Day 1: underlying up 10% = 110.00
Long 2x up 20% = 120.00
Short 2x down 20% = 80.00

Day 2: underlying down 10% = 99.00
Long 2x down 20% = 96.00
Short 2x up 20% = 96.00

Day 3: underlying up 10% = 108.90
Long 2x up 20% = 115.20
Short 2x down 20% = 76.80

Day 4: underlying down 10% = 98.01
Long 2x down 20% = 92.16
Short 2x up 20% = 92.16

As you can see, with equal up and down days repeated, the underlying moves down slowly but the 2x ETFs go more quickly. Repeat this way for 6 months and both ETFs would be worth only $2.54.

So GDX has been bearish since its 2011 highs… NUGT has absolutely collapsed as a result of this compounding, but DUST has stayed relatively flat for the same reason.

Interesting, huh? That’s why these “ContangoETFs” all work… even if you don’t have the actual “contango” from futures roll, you get this compounding tracking error dragging them all down.

Follow OptionsBistro and learn more!

DIS Iron Condor Jan 130/120…

DIS Iron Condor Jan 130/120 BeCS and Jan 100/95 BuPS for $1.05 Cr. this trade came up this morning in Tasty Trade. I didn’t make it, but I’m going to watch and see if it makes money….

STO SPX Jan4 2150/2165 1.55

STO SPX Jan4 2150/2165 1.55

DUST

GDX just getting killed…could see a 12 handle soon. Taking the other side of NUGT now. Just adding one to a current position. Will add more if GDX bounces around 13.

Sold 1 DUST JAN 15 2016 22.0 Call @ 1.60

#contangoetfs

#SittingonHands

Don’t know about you guy’s, but I’m just not seeing much to do today.

$SPY STO Jan. 29 215/220…

$SPY STO Jan. 29 215/220 BeCS @.45

$NUGT

STO Mar $59 Calls @ $0.95

Adding to March Ladder.

Time to come in from the KOLD?

Ginny was asking me and I was considering yesterday… time to buy an ATM put for the reversal? The May 210 put is going for about 49.00. If we get our reversal by then, it will be at least a double. Thoughts on this?

Also, STO $KOLD Jan 150 call for 64.00 as part of a roll from Dec positions. Actually REDUCED my margin because I have so many puts.
And, STO $KOLD Dec 195 call for 3.10… expires tomorrow. Threading the needle for this to end at 200 on the nose tomorrow.

TRIN-X just popped over 3.00

TRIN-X just popped over 3.00

Sold UVXY $55 calls expiring…

Sold UVXY $55 calls expiring next week. If that won’t trigger a market crash, nothing will.

AMZN Covered Call

Sold a call against some of my long stock. STO $AMZN Jan 15 2016 750 call @ 1.85

$SVXY #CoveredCalls – sold these…

$SVXY #CoveredCalls – sold these on the opening
SVXY MAR 18 2016 70.0 Calls @ 1.80
SVXY MAR 18 2016 71.0 Calls @ 1.60
SVXY MAR 18 2016 72.0 Calls @ 1.40

KOLD away

#ContangoETFs Overnight, two Dec calls took away my stock, which was bought at an average price of 203.00
Assigned: Dec 18th 115 call, sold for 19.70 on 11/19.
Assigned: Dec 18th 125 call, sold for 14.60 on 11/19.

Have we reached a bottom? Still have a couple 200 calls from Dec, and 5 more in Jan/Feb. Will look to sell some ITM calls to make up for losses on the assignments above. Should be a rip roaring ride back down, even if NatGas doesn’t rally hard… just needs to stop going down and this ETF will die.

$NUGT $KOLD

Gold is down hard this morning as the dollar is headed back up.  Good for short $NUGT Calls.  May add to positions today.  Nat gas is up again so $KOLD likely to drop back below $200.  Should help out your short calls.