Feed a KOLD, starve a BOIL

#ContangoETFs #Rolling $KOLD calls while KOLD puts and $BOIL calls expire today.

BTC KOLD Dec 200 calls for 13.20
STO KOLD Jan 255 call for 13.60
STO KOLD Feb 300 call for 16.00

UVXY

Sold to open January 2017, 170 call @10.70 adding to position but staying small.

BTO LNKD BF Dec4 227.5/217.5/207.5 Puts 2.48

also did STO Jan5 $UVXY 25/20 BuPS 1.90

$UVXY

STO Jan 15 $150 calls @ $1.50

WHR Short Puts

Borrowing a page from Iceman’s falling knife playbook.
Sold $WHR Mar 18 2016 110 put @ 1.26. I’ll take the stock at the strike in March if it comes down another 25% from these levels. Stock hasn’t traded at 110 in 2 1/2 years.
This replaces a 130 put expiring today. I’m also short a January 120 put. I keep selling out of the money puts on this stock and they keep expiring.

$KOLD #ShortCalls – Sold 1…

$KOLD #ShortCalls – Sold 1 KOLD May 20 2016 320.0 Call @ 23. Adding to my position at the top of the chain.

$UVXY #CoveredCalls #VXXGame – sold…

$UVXY #CoveredCalls #VXXGame – sold all these using market orders. Short trading week and the strike prices are above the recent peak.

Sold 1 UVXY Dec 24 2015 44.0 Call @ 1.29
Sold 1 UVXY Dec 24 2015 44.5 Call @ 1.28
Sold 1 UVXY Dec 24 2015 45.0 Call @ 1.24
Sold 1 UVXY Dec 24 2015 46.0 Call @ 1.10

$UVXY STO BuPS Jan. 31…

$UVXY STO BuPS Jan. 31 25/20 for .84-idea came from here-thanks

$UVXY #ShortPuts – sold the…

$UVXY #ShortPuts – sold the following to replace the strike 27 puts I just bought back at a penny.
Sold UVXY Dec 24 2015 23.5 Puts @ 0.14
Sold UVXY Dec 24 2015 24.5 Puts @ 0.29
These expire Thursday in a short trading week.

$UVXY #ShortCalls #VXXGame – Sold…

$UVXY #ShortCalls #VXXGame – Sold UVXY JAN 15 2016 85.0 Calls @ 1.50.

$DOV #ShortPuts – Bought to…

$DOV #ShortPuts – Bought to close DOV Dec 18 2015 60.0 Puts @ 0.50 to avoid assignment.
Originally sold at 1.30

STO IBF Dec PCLN 1290/1300/1300/1310…

STO IBF Dec PCLN 1290/1300/1300/1310 for 8.80 Day Trade

$UVXY #RiskManagement – Bought to…

$UVXY #RiskManagement – Bought to close UVXY Dec 18 2015 27.0 Puts @ 0.01.
Originally Sold on 12/14/2015 at an average of 0.50.

UVXY puts

Just a starter for now hoping to add more. Seems like decent premium even with UVXY up a little. These are margin free and replacing a bunch of 27’s from this week.

Sold UVXY DEC 24 2015 27.0 Puts @ .82

SPX calls closed

#SPXcampaign BTC $SPX Dec 24th 2110/2135 call spreads for .20. Sold for 2.00 last Friday as a #ReverseRoll from stopped put spread. This spread got up above 4.00 on Wednesday after Fed.

UVXY calls

Treading carefully. I have high offers in on some of the January weeklies. Just got filled on this one.
Sold $UVXY Jan 22 (weekly) 80 call @ 1.80. Highest strike.

#VXXGame

$AMZN iron condor

STO Dec 24 710/700/630/620 for 1.50
AMZN has been rather range bound and no real stimulus for it up or down in the next week.

FDX earnings butterfly

#Earnings #ironbutterfly
BTC $FDX Dec 18th short 149 puts & calls for 1.45. Sold on Wednesday for 4.15, so 2.70 profit. Thanks for the idea, @mortlightman!

$UVXY #RiskManagement – Bought to…

$UVXY #RiskManagement – Bought to close UVXY Dec 18 2015 26.5 Puts @ 0.01.
Originally sold on 12/14/15 at 0.35/0.40/0.45

$SVXY

BTC Dec 31 $64 calls @ $0.05

$UVXY

STO Dec 31 $56 calls @ $1.00

Quadruple Witching could add to Volatility

The exceptionally large Open Interest in options expiring this week could increase volatility on Friday and move stocks lower. It could also move them higher, but given where Futures are before the open, down seems to be the new black. As our VIX Indicator is currently under FOUR warnings (see side bar on the right), the risk is to the Downside.

The massive expiration was explained further on Fast Money last night: http://www.cnbc.com/2015/12/17/a-massive-expiration-has-traders-on-edge.html

#futures

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.

Site updates and expansion

On the right hand column of this page I have enhanced the VIX indicator Status to make current condition more clear. I will update this each day.

I am working on more changes, and I welcome any feedback on something I can include to he more helpful for everyone’s daily trading. Also, if there are any features you would like to contribute, let me know.

Also, I am always looking for additional followers and contributors. Feel free to invite anyone you know, and offer me any suggestions on ways to promote the site.

Thanks all for being here!

#Welcome

Out all afternoon and missed…

Out all afternoon and missed the excitement. Liking what I’m seeing now though. I knew Iceman could work his magic on KOLD for us! Turned into a very good day….

$UVXY #ShortPuts – all these…

$UVXY #ShortPuts – all these strike prices are below the all time low
Sold UVXY Dec 18 2015 23.0 Puts @ 0.33 – These expire in two days

Sold UVXY Dec 24 2015 21.5 Puts @ 0.41 – These expire next Thursday
Sold UVXY Dec 24 2015 21.0 Puts @ 0.33 – Short trading week

$SVXY #CoveredCalls #VXXGame – Sold…

$SVXY #CoveredCalls #VXXGame – Sold SVXY Mar 18 2016 75.0 Calls @ 1.15

$SVXY

Sold $SVXY Dec 31st 48 Put @1.40.  Will take assignment or roll if needed.

STO Dec FDX IBF 155/149/149/143 4.05 Cr

Earnings trade

#earnings

UVXY call closed

#VXXGame Reducing exposure, although my overall VXX position is light anyway:

BTC $UVXY Jan 2017 85 call for 9.60. Sold for 23.00 (avg price) over the summer.

$NUGT

Take a look at the intraday 1 minute chart.

$BOIL up 7%

$KOLD down almost as much

$NUGT

Dollar seems to be stabilizing so added back a position.

STO Jan’17 $75 call @ $5.40

 

$SVXY

Hopefully it can sustain some momentum for the next week or 2.  I think many of us would benefit greatly from this thing getting at least back to $65.

KOLD put

#ContangoETFs STO $KOLD Dec 18th 195 puts for 2.00

More KOLD rolls

With no more time value left in these I didn’t want to risk a short assignment (and a subsequent forced buy-in), and doing these rolls brings more loss into 2015.

Rolled $KOLD Jan 118 call to Feb 118 call for 1.60 credit
Rolled $KOLD Jan 115 call to Feb 115 call for 1.45 credit

These calls are too deep in the money to get higher strikes.

$SVXY #Coveredcall

STO Jan 15 $63 calls @ $0.90

Dud

How boring was that? Scalping $SXVY and $UVXY back and forth… buy 1,000 shares at a time, looking for .10 and .20 moves, sell, then switch to the other.

SVXY covered calls

Sold $SVXY Jan 15 2016 61.00 call @ 1.25

Sell the news IMHO

Sell the news IMHO

There it was folks- we…

There it was folks- we saw history. Only rate hike we’ll see in the next decade in my opinion. See ya’ll at 2250 S&P.

SCTY strangle

Borrowing this idea from TastyTrade. A 30 point wide short strangle in January for 1.45 credit. No earnings expected before opex.

Sold $SCTY Jan 15 2016 35 puts @ .73
Sold $SCTY Jan 15 2016 65 calls @ .72

$GLD $DXY

Something odd happened about 1:20pm, dollar took a serious drop and about 20 minutes later $GLD and $/GC dove as well.  Pretty odd that both the dollar and gold would go down together.  Good news for $NUGT, but wierd.

NUGT short call

#ContangoETFs following the herd, BTC $NUGT Jan 2017 60 call for 6.40. Sold for 25.00 on Oct 15th.

NUGT short calls

Reducing a small amount of my exposure as well. Mainly in the positions that are more delta dependent vs theta type positions.

Bought to Close NUGT JAN 20 2017 60.0 Call @ 6.50 (sold for 24.90)
Bought to Close NUGT JAN 20 2017 75.0 Call @ 5.30 (sold for 7.50)

$NUGT #ScalpTrade – Sold NUGT…

$NUGT #ScalpTrade – Sold NUGT Dec 18 2015 35 Calls @ 0.17. These expire Friday and are 9 points OTM

$SVXY

#CoveredCalls STO Dec 24 $56 calls @ $1.10

$NFLX #ScalpTrade – Sold NFLX…

$NFLX #ScalpTrade – Sold NFLX Dec 18 2015 105.0 Puts @ 0.13. Still trying to convince NFLX to pull back.

$SVXY #CoveredCalls – Sold SVXY…

$SVXY #CoveredCalls – Sold SVXY Mar 18 2016 75.0 Calls @ 1.10. I couldn’t let the stock rally all the way back from 43 without doing SOMETHING 🙂

#Markets – Interesting reading this…

#Markets – Interesting reading this morning on ZH. While the S&P 500 closed the day higher by nearly a half of a percent, there were just 810 Advancing Issues on the NYSE vs. 2326 Declining Issues. As a percentage of the total, the Advancing Issues equated to just 25.8% of issues. If that sounds low, you are correct. Going back to 1965, it is in fact the 3rd lowest percentage of Advancing stocks of ANY day that the S&P 500 closed higher. In other words, out of 6,702 Up days since 1965, yesterday ranked 6,699th in terms of breadth.

Straddles

Since ATM options are actually pretty cheap, I’m looking to buy straddles in $TLT and $HYG, looking for big moves in either direction (or maybe both directions) on today’s announcement. Small positions, so not risking much. If they don’t pay off today they could tomorrow or Friday.
Looking at this week’s expiration, HYG 80 straddle and TLT 121-122.

This week’s lesson for me…

This week’s lesson for me is, forget about shorting UVXY directly and just buy puts. Not only is it sometimes impossible to borrow shares, during a Fed week the plunge is so severe that no price is too high to pay for puts. If they indicate that today is the end of the tightening cycle, the UVXY $30 puts will end up being a 50 bagger from Monday. Impressive.

Good morning…

Fed day… if they act today, it will be the first day in history that we have a rate raise AFTER quantitative easing. In other words, no one knows what the reaction will be. I’ll be looking for possible day trades with $SVXY and $UVXY, and maybe $SPY or $TLT. I will consider short term #SPXcampaign spreads, but more likely hold off until the market settles into its direction in the coming days.

#PrepforFed

Because of the potential for significant moves following the Fed decision affecting the market, volatility and the dollar.  This morning I’m going to be closing down roughly 1/2 of my $NUGT positions.  They have very nice profits but are fairly illiquid so want lock in some gains and not feel the need to mess with them when things are moving fast.

Looks like the market is going to be strong this morning, so will likely reduce some $UVXY and $SVXY profitable positions.  If we get a nasty reaction like last time, I’ll have the opportunity to re-enter positions at better prices.

OMM, KOLD and the GG

After reading the latest missive from GG I just couldn’t help myself. I’m sure he’s a good trader but bragging about a winner and making fun of (his perception) of another person’s possible misfortune is pretty sad. Here’s his post followed by my response…

—————————————————————————————

$KOLD finally sold my shares on this parabolic move at 218 and change this inverse levered ETF ( see earlier post on CC attempt sale) ; now that’s extended ; check out chart BTW $BOIL hit yet another ATL as is down well over 90% in year ; funny how so many traders here argued very aggressively that naked put sales when ETF was 100 -125 would make money in the end ; now that ETF is down 90% since they’re no where to be found ; now I know these trades were likely all closed out for huge loses in many cases yet not single post I saw on the related losses ; bottom line = selling naked options on commodities experiencing multi-year downtrends can end a trader up in the poor house no matter how much contra option selling a trader attempts ; not to mention outsized tie-up of capital which is losing money on these ETFS many of which aren’t marginable ; don’t get me started selling naked options on illiquid securities like $KOLD ; traders should just avoid these types of trades like plague ; this is the 2nd year in year many of these same traders made this costly mistake on thesis don’t worry winter is coming Nat gas will go up when it gets cold ; arrogant to assume IMO that wasn’t already priced in market IMO. BTW Nat gas hit seasonal low last winter ( Jan/Feb)when Northeast was experiencing record and sustained cold. El NINO pattern warmer than expected long term continues to crush this commodity as it makes daily multi-year lows with IMO zero signs /technicals in charts that bottom is near ; look at charts of $CHK and $SWN the two Natty gas big boyz YUCK!!!!!!!

—————————————————————————————

@GreenGhost $KOLD $BOIL – I’m still here…LOL Not in the poor house yet. You’re right…this KOLD is a thorn in my side but talk about a learning experience in damage control! Luckily stayed very very small. By the way…great trade going long on it!

How’s this sound? Not saying it’s great but desperate times call for desperate measures. Looking back the original trade was a BeCS that moved bad against me so made the mistake of closing the long protection and taking the big profit on it figuring I could work the short side with puts and rolls.

As it continued moving against me I sold ITM puts and continued rolling them keeping them slightly ITM all the way up while rolling the short ITM calls up and out to Jan. Eventually the width of the inverted strangle was equal to the total premium I had received (61 dollars total). At that point I started buying ATM calls totaling 100 deltas since the ITM calls were now at 100 delta. I eventually switched to stock since it’s a little easier to get in and out of.

So at this point this thing could go to the moon and my position will remain the same…long stock covering calls with 61 bucks premium in my pocket. I’ve got a little cushion on the stock to the upside as well so I can hang onto it until it starts dropping and still unload it for additional gains.

Downside is the buying power it’s tying up which isn’t the end of the world. Even if I have to hold this thing for 2 years while rolling the short calls up every month I’m still looking at 25 percent annualized on margin or even better if this thing pulls back sooner. Can probably still juice the returns even more by selling really safe puts each month…not to mention what I’ve added to the bottom line shorting BOIL calls all the way down…(I don’t ever short BOIL puts!)

So there ya go…things aren’t always as they seem. I know @Iceman is still in it and @JeffCP is in a similar position as me…even though he resigned his OMM membership we’ve been able to stay in touch on a few trades.

I know, I know, just going long would’ve been smarter and better. Guess I’m an idiot at times!…LOL Trying to make a little lemonade out of this lemon.

$KOLD BTC Jan 114 put…

$KOLD BTC Jan 114 put @ .74, 31 days early, STO on Dec 3 @ 3.40, for 75% profit in a traditional IRA account to free up cash for opps in the next couple of days.