Option Iceman 1:20 pm on Thursday, January 14, 2016
Tags: ShortPuts ( 4,763 )

$UVXY #ShortPuts – Sold UVXY…

$UVXY #ShortPuts – Sold UVXY Feb 19 2016 19 Puts @ 0.34.
Also Sold UVXY JAN 22 2016 85.0 Calls @ 0.79 and UVXY JAN 29 2016 85.0 Calls @ 1.80

vxxkelly 5:49 pm on Thursday, January 14, 2016

Good idea on the Feb 19, $19 puts. I don’t mind selling puts a month out if they are that far down and can get a good premium for them. If market is up tomorrow, maybe we’ll get a better pull back in $UVXY. I’m going to put in a GTC order @ $0.50 and see what happens.

This morning when the market was looking weak, I was looking at my $UVXY Jan 22 $80 calls, they were right at break even and it was looking like I was going to get a chance to get better prices. I closed them at break even ($0.91) vs adding additional calls. Instead of reselling the $80’s, I sold $85’s @ $.90. So I ended up with basically the same cost basis, but at a $5 higher strike price.

I have more than 50% of my open $UVXY calls expiring by Jan 29. Selling short term calls, at opportune times (happening a lot right now) at 100% OTM has been bringing in nice premium without taking on significant risk or having to hold them for long periods of time and watching them gyrate all over the place. Good premium and short time = great theta.

This is what I’m currently doing:
$UVXY > $35, selling calls.
$UVXY < $30, I shift focus to selling short term (generally not longer than 10 – 14 days) puts below $25.
In between $30 and $35, no mans land, I don't do anything. I don't get enough premium for the short term puts below $25 or the calls @ 100% OTM for my risk/reward.

This morning after the market started to recover, I saw that I could still sell the $UVXY $55 calls expiring tomorrow for $1.00. Really wanted to jump on that but chose not to. Already had enough open contracts this week, resisted being greedy. Market is giving us plenty of opportunities right now.