#AlligatorFuzzy Ok, here’s the latest…

#AlligatorFuzzy
Ok, here’s the latest entry into the #Fuzzy family.
Backing up a bit, there’s something every #Fuzzy has in common: A combo trade of a 2-part synthetic (long or short) coupled with protection for full risk definition. 3 legs, all the same expiration.
A Regular Fuzzy (the original one named after @fuzzballl) then uses short dated short hedges for trade debit recovery and weekly income.
An Atomic Fuzzy eschewed the short dated short hedges for a double size hedge using the same expiration as the core fuzzy–solving the problem of runover hedges.
Regular Fuzzy Pros: Efficient use of capital, risk defined, weekly income
Regular Fuzzy Cons: Protection very expensive in high vol, hedges frequently get runover
Atomic Fuzzy Pros: Efficient use of capital, risk defined, partial-to-full financing of protection (particularly useful in high vol)
Atomic Fuzzy Cons: No weekly income, which increases directional risk

Combining these two trades into a new trade solves the cons on both trades–it is essentially a Fuzzy Diagonal. There are two versions, an #AlligatorTrap is bullish, an #AlligatorSnap is bearish.

This trade uses both a long dated hedge (matching the core expiration and quantity) and short dated weekly hedges. The trade, in essence, has a triple hedge! Hedge #1: Core protection, Hedge #2: A credit spread using the core expiration, Hedge #3 A short dated short hedge. Believe it or not…perfectly legal in a 401K. I will be attaching a slide showing risk graph setups, a proper diagonal setup on the risk graph should significantly reduce the hedge runovers.

Here is the exact trade setup that I did last week for a long on SPY (captured on the attached slide)
SPY May monthly: +263c/-263p/+259p (this is the core fuzzy) @5.62 debit, then add a CCS 269/273, same qty, @1.55 cr. Then enter the weekly income hedge: Apr 6 270c @.63.
Particular setup rules: 1. The 3-leg core debit = “X” 2. Use ATM + X for the anchor short leg of the CCS. Those 5 legs should give you a “ledge” type risk graph where the ledge is solidly above 0. Finally add in the short dated short hedge–the best graphs work up with the calls at the same strike as the CCS anchor on the long dated core, or higher.

Everything can be reversed for a bear trade. Here’s an Alligator Snap (bear)trade I did on QQQ this morning:
Jun -157c/+157p/+160c @ 5.09, 152/147 PCS @ 1.34 cr ($157-$5=$152 for anchor). Then an Apr 6 152 short put @ .77. This puts the starting trade debit at $2.98. Accrued credits on rolling the short dated hedge will attack that trade debit. The bear side of this trade, due to put skew, will allow for more lucrative put rolls in an uptrending market.

So, in conclusion, this trade brings the best parts of the regular fuzzy (weekly income) and atomic fuzzy (protection financing) together. Check out the attached slide for risk graph setups, let me know your questions. I have about 8 of these trades on right now, 6 traps and 2 snaps. I’ve already rolled short hedges from last week.
Thanks to @MamaCash for the creative name…I was just going to call it a Fuzzy Diagonal….but Alligators are way more fun 🙂

Alligator

2 of 3 of 5: Not yet!

Y’all know I’m keenly watching for 1-standard deviation up moves in SPX. We need 3 1SD up moves in a 5-bar window (for historical rally confirmations). We got one on Thursday. Today’s slipped through the fingers, darnit. We got a .933–the rule is it must cross 1.0. Wed and Thur still fall into the 5-bar window.

#AlligatorFuzzy anyone? I have a new #Fuzzy! I believe this is the best one yet. The love-child of regular fuzzy and atomic fuzzy. I will do a full write up on it maybe later tonight. I really think you will find it very compelling.

Sue

#vixindicator

#ironcondor AMZN March 28, sold…

#ironcondor AMZN
March 28, sold April 20 IC for 2.00, closed today for .84. IV is still really high but I’m taking the gain.

TQQQ bearish fuzzy

STC January 2019 Bearish Fuzzy. Bought for 27.50 and STC for 29.55

STC 165 puts

BTC 165 calls

STC 170 calls

BTC April 20145 puts

#shortstrangles EWZ TastyTrade idea, sold…

#shortstrangles EWZ
TastyTrade idea, sold May 18, 42/47 strangle for 1.78

XBI

#SyntheticStock – Looks like it’s easing below the 200ma so I’m selling just above it…

Bought to Close XBI APR 6 2018 89.0 Calls @ .06 (sold for .83)

Sold XBI APR 13 2018 86.0 Calls @ 1.05

AZO

#BullCallSpreads – Letting this week’s expire so selling next week…cost basis reduction in the Jan Bull Call Spread…

Sold AZO APR 13 2018 640.0/670.0 Bear Call Spread @ 2.55

REGN

#SyntheticStock – With the weak market I’m rolling this thing back in and down. Hopefully can get it off the books a week sooner freeing up an extra sale.

Rolled REGN APR 20 2018 350.0 Calls to APR 13 2018 340.0 Calls @ .36 credit

#shortputs AMAT Sold April 20,…

#shortputs AMAT

Sold April 20, 50 put for .76

#pietrade

TSLA

#ShortStrangle – Had a one lot strangle where I closed the put side as the stock started imploding. Continuing to sell the call side while waiting to add the put side back in at some point.

Sold TSLA APR 13 2018 290.0 Call @ 1.45

PYPL

#SyntheticStock – Going out another week…

Bought to Close PYPL APR 6 2018 78.5 Calls @ .05 (sold for .80)

Sold PYPL APR 13 2018 76.0 Calls @ .94

LUV

#SyntheticStock – Order in to cover this week’s at a nickel. Selling next week into the tiny up move…

Sold LUV APR 13 2018 56.0 Calls @ .68

VXX

#BearPutSpreads – Selling against my Jan 2019 50/30 Bear Put Spreads….trying to gradually cover the debit.

Sold VXX APR 13 2018 46.0/41.0 Bull Put Spreads @ .63

OLED

#SyntheticStock – Selling well below the core but still bringing in enough to cover the repair of an old earnings strangle. Double sale with this week’s still running…

Sold OLED APR 13 2018 103.0 Calls @ 1.95

CRUS

#SyntheticStock #LongCalls – If I can close for a nickel on Mon or Tue and get next week’s sale going it’s well worth it to pay up I think…

Bought to Close CRUS APR 6 2018 43.5 Calls @ .05 (sold for .50)

Sold CRUS APR 13 2018 40.5 Calls @ .65

XLY

#SyntheticStock – I’m going to keep aggressively selling the rips for at least another week especially while premiums are so juicy…

Bought to Close XLY APR 6 2018 103.5 Calls @ .05 (sold for .73)

Sold XLY APR 13 2018 100.5 Calls @ .93

VXX this morning

#VXXGame
Closed my last $UVXY May 18th 20 call for 3.80. Sold for 2.50 on March 19th.

Partially #Rolling Sold $UVXY Apr 27th 19 puts for 1.56

Sold $VXX Apr 27th 44.5 put for 1.25 and 44 puts for 1.15.

#shortputspread AAPL Tradewise recommendation, April…

#shortputspread AAPL

Tradewise recommendation, April 27, 160/162.50. They see earnings on April 30 as supporting the price that has dropped 10%.

XBI

#Fuzzy – BTC XBI Apr06’18 91 calls for 0.04, sold for 0.46. Leaving my synthetic position unhedged for now (although waiting has not worked well lately!)

Could more pain help?

I thought this was an interesting view on the current #Market

SPX trades

#SPXcampaign Spent the morning doing mostly the reverse of yesterday… putting on call spreads and taking off put spreads.

Closed $SPX Apr 6th 2475/2450 put spreads for 1.30. Sold yesterday for 2.20.
Sold Apr 6th 2650/2675 call spreads for 3.65
Bought to Open Apr 13th 2450/2425 LONG put spreads for 2.30.
Sold May 4th 2760/2785 call spreads for 1.70.
Stopped Apr 27th 2460/2435 put spreads for 3.80. Sold Thursday for 1.75.
#ReverseRoll Sold Apr 13th 2670/2695 call spreads for 3.75.

AMZN

STO April 20, 1050/1100 bull put spread @ 1.20
Looks like I was too early on this one.

#supercharger this is the ITM…

#supercharger this is the ITM vertical debit spreads.

The adjustment to ERX yesterday is already paying off. With only a 0.24 increase in ERX, the long has gained and the short has decreased in time value so overall profit $750 on 10 contracts. Technically it is now a #fuzzy and that appears to be the way to adjust one that goes against you quickly and easily. Of course it has already moved through my short strike but will be easy to roll next week and have 41 weeks left of selling now to reduce cost basis. In 8 weeks should be a risk free trade.

Of all my positions yesterday, this one was the least underwater even though it was the biggest down percentage wise.

I will keep experimenting with these through all market conditions and see what is the best way to adjust them, what is the ideal time to put them on, and which conditions are ideal for them.

Will keep you posted as to how they work out longer term but think this may be a very viable trading idea. I may even buy the course, only $39 to see what the official recommendations are but with the trading brain power we have here I think we can figure it out! I also don’t think the course goes into adjusting, I think they just take them off at a set loss point.

#shortputs FEYE Rolled April 20,…

#shortputs FEYE
Rolled April 20, 17 put to May 4 for .40

Good Morning

Good Morning