I tend to learn something…

I tend to learn something every down turn. This one is no exception. Will keep it short and sweet.

1. Always keep a hedge on. Whether that is VIX futures, SPX puts, /es put or puts on your portfolio. I calculated my SPX hedges that I closed 3 weeks before the market sold off, each contract peaked at 43k Christmas eve, I had 2. That would have more than offset my losses and given me a pile of cash to trade or pay off my mortgage. I think going forward I will sell some leap puts on something I want to own and use the proceeds to cover hedges for an entire year. Call it the house paid for lottery ticket. If it even pays off once a year is worth it. Even once every 2-3 years it will pay for itself.

2. When direction starts to change, quickly ratio your spreads for the directional kick. Perhaps as early as delta 30.

3. Long stock set up a 30 dte synthetic short. Sell 1 atm call on your stock and buy just as many atm puts. At least then your losses are capped and may be a lottery ticket again. Good idea for IRAs.

4. Always keep some cash handy for opportunities like this.

5. Once a spread is deep ITM, probably better to close it and start over. Commissions are low enough now even at TOS that I probably should have reset 3 of my #fuzzy.

6. Volatility creates opportunity but also sometimes wide spreads and trouble trading. What you thought was liquid not so much when the SPX is down 300 points. Better to have the adjustment on early.

7. Not sure the bear is over but today helped all my positions so I will start looking to unwind when I can. Market drops give you a chance to reset trades.

8. Once a bottom is put in go syntheic long and don’t cap your gains!!

Hope everyone else is recovering and has some cash ready 🙂

Just read a statistic

25% of the S&P is trading below 10x earnings.
On the techncial side, T2108 (% of stocks above their 40 day moving average) is still deeply oversold obviously at 6.45. It got down to 3.45 on Monday–it hasn’t been at that level since the implosion in Oct 2008.
Hoping today’s impressive action actually means something. Would love to be dipping my toe back in but I’ve been cautious. Some follow through (similar to the Dalia Lama’s promise of total consciousness)…would be nice.

OLED

#ShortCalls against #BullPutSpreads – More risk off on extra sales.

Bought to Close OLED JAN 4 2019 110.0 Calls @ .20 (sold for 1.15)

XBI

#LongCalls #LEAPS – Booking a full position and selling a half position.

Bought to Close XBI JAN 4 2019 77.0/82.0 Bear Call Spreads @ .09 (sold for .71)
Sold XBI JAN 18 2019 77.0 Calls @ .76

TQQQ

#LongCalls #LEAPS – Pounded this one pretty hard all the way down. Staying careful now to get out of the way in case of a big rally. Closing more extra sales for profits.

Bought to Close TQQQ JAN 11 2019 43.0 Calls @ .40 (sold for .67)

DG

#BullPutSpreads – Giving back a little of the profits booked on the way down and getting deltas back in balance. Selling against 110/90 bull put spreads so all good overall.

Bought to Close DG JAN 11 2019 109.0 Calls @ 1.35 (sold for .92)

WTW

#LongCalls #LEAPS – Triple sales on this one so taking some upside risk off even though these were still very safe. Not getting greedy here…

Bought to Close WTW DEC 28 2018 48.5 Calls @ .15 (sold for 1.85)

AAOI

#CoveredCalls – I’ve finally begun the long slog to as much of a recovery as I can get. Early assigned on Jan 2020 70 strike puts a few weeks ago. (70 strike with a basis of 53.75…uugh). I am long some Jan 2020 12.5 puts that are nicely profitable but not booking those yet.

Replacing this week’s covered call expiration. (sold for .40)

Sold AAOI JAN 18 2019 17.0/25.0 Bear Call Spreads @ .49

Looking for a buck a month and a little recovery in the stock to get out. Using spreads in case we wake up one day and they’re getting bought out for 50 bucks (not sure who would want them…LOL). At some point a bankruptcy will be more beneficial with my long puts but for now still need some basis reduction.

MO

#LongCalls #LEAPS – Small position in a low priced stock. Need 4 cents per week out to 2021. 🙂 Already recovered 25 percent of the LEAPS cost.

Bought to Close MO DEC 28 2018 53.0 Calls @ .02 (sold for .36)
Sold MO JAN 18 2019 51.0 Calls @ .53 (one week prior to earnings hopefully)

Finally some what appears to…

Finally some what appears to be short covering rally. Even if santa is a few weeks late I will take it 🙂

SMH

#LongCalls #LEAPS – More oversales. Taking these off at 50 percent of max…

Bought to Close SMH JAN 11 2019 91.0/96.0 Bear Call Spreads @ .33 (sold for .71)

A TRADE:

SFIX STO 1/4/19 16.0 PUTS @.40

TNA

#LongCalls #LEAPS – Oversales on these also. Haven’t replaced them (yet)…

Bought to Close TNA JAN 4 2019 55.0 Calls @ .02 (sold for .52 as BeCS)

DG

#ShortCalls #BullPutSpreads – Triple sold these so taking the stop out on this batch at a decent profit…

Bought to Close DG JAN 4 2019 110.0 Calls @ .44 (sold for .70)

TRADES:

NRZ BTO STOCK @ 14.52
PBYI BTO STOCK @ 21.27

TQQQ

STO January 2021, 55 calls @ 5.50 which are offset by my 2021, 60 calls. I am scaling the calls out and my next level is 6.10 and, I still have the January 18, 2019, 50/55 call spreads that I expect to expire at zero or I may cover at .05 cents. My reasoning is that even though we are going up today and the market is very over sold, the trend is down and we are in a stage 4 decline. I expect the bear market to last 12 to 18 months.

When I see the market move above the 30 week moving average on volume, I will cover the 2021, 55 calls and see if we can make a new high if we are in another bull market at that time. That is my game plan and I have 2 years to make it work. I still intend to sell short dated call spreads  against the 2021 calls.

SPX 1-dte

#SPX1dte Closed shorts for .05 each. On Monday, sold the 2215/2235-2470/2490 condors for 1.40. Tomorrow I’ll sell one for the Friday expiration.

TRADES:

ROKU STO 12/28/18 29.5 CALLS @.38
DBX STO 12/28/18 19.50 PUTS @.30
DBX STO 12/28/18 20.0 CALLS @.40 Will buy stock to cover if necessary.
All expire in 3 days. All naked.

SMH TQQQ UVXY WYNN

#LongCalls #LongPuts #LEAPS #CoveredCalls – Selling the rip again…

SMH: Double dip next week…
Bought to Close SMH JAN 4 2019 94.0 Calls @ .04 (sold for .55)
Sold SMH JAN 4 2019 86.0 Calls @ .70

TQQQ: Covered…
Sold TQQQ FEB 15 2019 40.0 Call @ 1.70

UVXY: Double and triple dips…
Rolled UVXY DEC 28 2018 75.0 Puts to DEC 28 2018 81.0 Puts @ .90 credit
Rolled UVXY JAN 4 2019 65.0 Puts to JAN 4 2019 75.0 Puts @ 1.13 credit

WYNN: Covered…
Sold WYNN JAN 18 2019 105.0 Call @ 1.80

SQ closed

#LongLEAPs #SyntheticCoveredCalls
BTC $SQ Dec 28th 58 calls for .07. Sold for .75 on Friday.