$UVXY I’m short the weekly 26.0 Put. I’ve rolled it out twice already. Does there come a point when you have to take the loss, or do you just keep rolling it out. I’ve never experienced this before, where the stock just keeps losing ground.
Anybody?
Daily Archives: Wednesday, March 30, 2016
SPX puts sold
#SPXcampaign Sold to open $SPX April 14th (monthly) 2000/1975 put spreads for 1.55. Adding more to this spread, originally sold some for 5.00 last week.
UVXY rolling
#VXXGame I’ve been letting a few too many UVXY puts get a little too far ITM.
BTC UVXY Apr 15th 24 put for 5.60
STO UVXY May 20th 17 put for 2.35
STO UVXY May 20th 32 calls for 1.45
That put I closed was already a roll-out from previously closed puts. Sold for 1.25 on 3/1. I keep rolling into strangles, then have to roll the puts again as the calls go to a nickel. Gotta keep #rolling …
AMZN
AMZN Apr 1 600/602.50/607.50 broken wing call butterfly for 0.50 credit. Expires this week.
Max profit 300, max loss at 200. Breakeven at 605.50.
My thesis is that AMZN stays below the 602.50 area which looks like resistance today.
UVXY call spreads…completely out (bummer!)
The last ones…
Bought to Close UVXY JUN 17 2016 70/80 Bear call spreads @ .14 (sold for 1.10)
FWIW….from VIXCONTANGO.com
The market is moving into an area where it is going to start getting afraid of its own shadow. It’s getting too close to the sun. But fear not a big drop is unlikely especially if we hold the gap that we opened this morning. If we do establish a gap today, this has long-term bullish implications as this will be a mid-point or mid-rally gap which means that this rally will be going a lot further and will last a lot longer. If the gap does hold, we are looking at a move from here as big as the 1810 to 2060 move which is roughly 250 points. That points to about 2300 on the SPX. I know it sounds crazy, but this gap is either an exhaustion gap or a mid-point gap and I don’t think it is an exhaustion gap. Although seeing PCR go below 1.0 today could point to exhaustion, in no shape or form should you get ahead of this bull train and start shorting. The market needs a multi-day and multi-week consolidation phase before it rolls over and we are nowhere near that right now.
In the short term, the 2080 area of the SPX is where the last major Lower High was so I expect the SPX to hesitate in that area before it pushes forward. Today it got up to 2072, but that’s not close enough yet to challenge that resistance. But we should challenge 2080 soon. Probably on Friday. I expect the next couple of days to continue to be subdued as people wait for the jobs report.
Very bizarre to see the VX1 trade up a 1% to 16.25 since the VIX hasn’t been above 16 since March 15 and is currently anchored in the 13.50-13.70 range. I have no idea what these people are thinking. Expiration is in 14 days. Everything else is negative. Not only that, on Friday we have the April jobs report which is the best month for not-seasonally adjusted (NSA) jobs at 883K average and the 4th best for seasonally adjusted (SA) jobs at 123K average. The number that is widely reported is the seasonally adjusted number. In any case, the best month for SA jobs is May with 140K average and that is also the 2nd best NSA month at 847K. So I have no idea who is buying the VIX in front of that train of news, but those people apparently do exist. Be my guest and go long volatility when on average 1.5 million people enter the workforce over the next 2 months. Good Luck!
UVXY call spreads
This was kind of an odd ball that started out as an 80/100 that I’ve been rolling down. Think I’ve captured about all the delta on this one that I can and not much theta that far out so closing it for about two thirds of max profit. Guessing by June other opportunities will come along…
Bought to Close UVXY JUN 17 2016 45/100 Bear call spreads @ 1.09 (sold for 3.05)
#Fidelity
FYI #Fidelity I just received an email about my password had been blocked which was odd as I hadn’t been in the account in a week. I call their security and no event had taken place. They suspect this is a phishing event. The logo in the email is identical to theirs so if you see this don’t click on any link. Call them for verification.
SPX call spreads
Added again…
Sold SPX JUN 30 2016 2200/2225 Bear call spreads @ 1.75
If these get in trouble I’m taking 2 weeks off and going to Mexico. I’ll sit on the beach and drink a lot of tequila and get “XIV 50” tattooed on my ass! 🙂 🙂
SPX calls stopped
#SPXcampaign Bought to close $SPX April 1st 2070/2095 call spreads for 4.75. Sold for 1.35 on March 1st. Failed to follow my own rules and close this for cheap when I could have. But at least I avoided the panic today when it got above 7.50. Adding to a long list of rolls I’m chipping away at.
SPX call spreads
Added this morning…
Sold SPX JUL 29 2016 2225/2250 Bear call spreads @ 2.10
$SPX
All thanks for the comments. I sat on my hands and let the initial angst fade away. I shall trade my plan but I lowered my roll alert down to 2080 per Jeff’s comment. Bobbie, what method do you use to calculate an expected move as I have seen a few different approaches. Ramie, I agree 2100 is resistance, at least in the short term and the three day rule may bring us some relief. Thanks again.
#Gold $NUGT Gold is looking…
#Gold $NUGT
Gold is looking pretty weak. Even though the dollar ($DXY, $UUP) is down again today, gold has no follow thru from yesterday’s move. Gold was at much higher prices a couple weeks ago when the dollar was much higher. Looks like it has started making lower highs. $NUGT’s jump yesterday increased the premium’s enough to make it worth while for me to make a couple trades between yesterday afternoon and this morning. Not getting very aggressive and still staying pretty short term.
STO $NUGT Apr 8 $80 calls @ $1.00
STO $NUGT Apr 22 $100 calls @ $0.90
STO $NUGT Apr 29 $105 calls @ $1.15
SPX call spread in 4/29
Sold $SPX Apr 29 2140/2165 BeCS @ 1.30
#SPXCampaign
Fun with bonds
Sold $TLT May 20 125 puts @ 1.15. Offsets and creates a short strangle with May 135 calls.
SPX broken wing butterfly
STO SPX broken wing butterfly
Apr 8 2070/2075/2085 for 1.60 credit.
Max loss 3.40. Max profit 6.60.
Breakeven if SPX 2081.60
$SPX
Morning. Baring my soul. I have the SPX April 15th 2100/2120 BeCS. Sold at 1.20 a day late. Obviously underwater. I probably should have closed it yesterday at the 50% loss mark. I set an alert at 2090 to prod me into a roll which is my plan. I am wondering if closing it or rolling if for 2X as much now is the prudent thing to do? My experience with negative spreads is I get very anxious and make emotional decisions. My big bane which I am working on this year. I know window dressing will continue for another day and there may be dumping come Friday. I know Yellen has sparked a rally but is it enough to push the SPX to 2100 in 2 weeks. Comments welcomed.
YHOO Loss
BTC YHOO 36/38 BeCS for $0.95 Sold for $0.50 yesterday…a $0.45 loss!
my GOOGL Trade placed earlier…
my GOOGL Trade placed earlier this month is finally profitable. I took the 700/680 bu put.
$VXX
BTC May 20 $45 calls @ $.05, sold for $2.32.
Out 51 days early
These were the last of the $VXX calls that I was short.
$UVXY
My timing wasn’t great last week when I reverse rolled my short puts into short calls. Would have done much better a couple of days later, but I’m very glad that I did it.
SPX puts closed
#SPXcampaign In pre-market, bought to close $SPX April 8th 1950/1925 put spreads for .20. Sold for 1.30 on 3/23.
The Importance of the Greeks!…
Back when I was taking my first options course, I remember the instructors emphasizing how important the Greeks were in trading options.
The truth is that, at the time, they didn’t look so important to me.
Well, after reviewing a lot of losing trades as well as some small winners, I found that most of my losers and those winners were I made very little, were due to not matching the right strategy with the market conditions; basically, the root of the problem was not watching the Greeks when placing the trades.
The majority of my problems came from trying to fit the wrong strategy for the market conditions at the time. Like selling credit spreads on a low volatility environment; buying options or debit spreads on a high volatility period; Using Iron Condors when the market was running hard. Using debit spreads on a squeeze; using Calendars or Diagonals on decreasing IV periods.
I wonder how much money I would have saved, by just looking at the damned Greeks!
What about you guys; do you watch the Greeks before placing a trade?
Rally resuming
After a couple weeks of consolidation the rally higher may be resuming. Expect a new 2016 low in the VIX this morning, and new all-time low in UVXY. With a VIX Upside Warning, it’s possible for strength to continue until we regain the pre-correction high, which in this case was the November 3rd high of 2116. If we make it that far without a serious pullback, upward strength should at least slow.
Non-farm payrolls on Friday could be another catalyst.
Interesting Article from a Fund Manager.
The Big Picture … Market Perspectives
By Bryan Rich
March 29, 2016, 3:30pm EST
There are two signficant events this week for markets. One came today. The other comes Friday (the employment report) which we’ll talk about later in the week.
First, today, Janet Yellen (the Fed Chair) gave a prepared speech in New York and answered questions. This is the first time we’ve heard from Yellen since the Fed surprised the market on March 16, by removing two (of what was previously four) rate hikes from their projections for the year.
In this environment, as we’ve said, by telegraphing a “less tight” policy, that’s effectively easing. And that has enormous ramifications for markets and the economy.
Still, the Fed’s action was just another leg in the coordinated policy response, by global central banks, to the bust in oil prices and the threats that it represented (i.e. bankruptcies, defaults, banking instability).
From the moment oil hit $26, the central banks have circled the wagons. The BOJ has acted (currency intervention), the ECB has acted (QE+), China (boosting bank lending) has acted and the Fed has acted (guiding a “less tight” path).
Source: Billionaire’s Portfolio, Reuters
The coordinated response from central banks has manufactured a 50% recovery in oil prices (moving many shaky energy companies away from the bankruptcy edge) and has reversed stocks from down on the year, back to positive territory.
So with this backdrop in mind, today, Yellen further cemented an easier stance than the Fed had in December. That further suppressed market interest rates (which maintains the fuel for housing and consumer credit recovery), pushed stocks higher (paper wealth, which makes people feel wealthier – they spend, they hire) and pushed the dollar lower, which underpins the recovery in commodities (further quelling the threat of the oil price bust). Expect that market reaction to continue.
The Fed has made it clear, they want to chase inflation and are happy to get behind the curve. We think we will look back at this Feb-March period (the coordinated actions) as the bottom in monetary policy (i.e. markets, inflation and growth go on a run from here, and global central bank policy ultimately turns from here).
Have a great night.
Regards,
Bryan
Options Bistro 