NUE: I ended up closing this one for a net net loss of $340.00 How did I lose? It started off as a lovely trade. The round-one hedge expired with full profit. But the company then came out with lowered guidance and the underlying tanked over 3%, so I rolled the next week’s hedge down $2.00 to my synthetic line. We then saw a literal whipsaw correction which left me chasing each week with debit rolls to avoid assignment on my hedge, and ex-div is Thursday. Continuing debit rolls to get me out of assignment territory on the short calls would leave me with protective puts $15.00 ($15,000) away with no “bank” due to debit rolls. To me, chasing only makes sense when you know the underlying is going to stay bid, and to me a $340 loss on a 10-lot is pretty darn close to a scratch. I’d rather do a reset on this or another, vs. having $15K risk on a less-than-$100 stock.
AAPL: This takes the place of NUE. BTO Apr 170/170/160 for 5.27 debit, STO Jan 5 172.5 call for 1.32 cr
QQQ: BTC Dec 29 159c for .03, STO Jan 5 158 c for .47
CMCSA: I did a search on SP500 stocks with a weekly ATR of 2 or less, looking for stocks with decent premium for quick core debit coverage, but stocks that stay relatively stable with price movement. I’m just still playing around with finding the perfect candidates for #fuzzies. Take JPM for example…seems to stay in a very nice range for collecting that premium every single week. So anyway, CMCSA came up on the list, boring maybe, we’ll see how it works. BTO Apr 40/40/35 for 1.38 debit, STO Jan 5 41 call for .56.
BABA: Caught some bullish #UOA on this today, and has lovely weekly premium. Chart technicals not so great. But decided to do a 1/2 size fuzzy. Apr 170/170/160 for 9.43 debit (there’s a few bucks intrinsic in this), Jan 5 175 c for 1.93 cr.
I’ll do another full recap this Friday with every open position, net collection and debit recovery.
Options Bistro 