Rolling ETSY TQQQ / Expired 1 DTE

$ETSY BTC 3/15 65 call and STO 4/18 70 call. Total credit received so far 1.05. Basis 50.25

$TQQQ BTC 3/15 53 call and STO 3/22 53 for additional .65 credit

$SPX 2730/2760/2824/2845 STO at .80


#CoveredCalls – BA news gave the market just enough of a pullback to fill these. Trying to squeeze a little more out of these so rolling out but not up keeping some downside protection.

Rolled TNA MAR 15 2019 60.0 Calls to TNA Apr 05 2019 60.0 Calls @ 1.35 credit

Rolled TQQQ MAR 15 2019 50.0 Calls to APR 05 2019 50.0 Calls @ 1.00 credit


#ShortPuts #FallingKnife – Starter position just before next earnings…

Sold 1 ROKU APR 26 2019 50 Put @ 1.35

SPX 1-dte

#SPX1dte Sold $SPX March 14th (monthlys) 2750/2770-2855/2875 condors for 1.00.(IV 13%, SPX: 2816)

#earnings AVGO Jeff I almost…

#earnings AVGO

Jeff I almost missed fan favorite AVGO reports tomorrow, do you have data? Thanks



Compounding effect on levered ETF’s – TQQQ

I am long $TQQQ 66.67 LEAP calls for Jan 2020. I wanted to look at the effect of compounding on the TQQQ, which moves 3x the $QQQ on a daily basis. Levered ETF’s like this are naturally drawn toward zero, a topic I’ve covered before as #ContangoETFs. This is why some of us sell calls on $DUST and $NUGT and a few others like $BOIL. Even though they can go high pretty fast, they will always be drawn back toward zero.

Here’s a chart from my long-ago webinar demonstrating the effect, using hypothetical 10% moves, up and down, on $GDX, and its levered ETFs NUGT and DUST:

Compounding 2018-06-04 at 1.06.43 PM

As you can see, over just 4 days of moving up and down, GDX is only down 2% and both ETF’s are down 18%. Note that even though NUGT is bullish and DUST is bearish, they moved down the exact same amount.

So I was thinking of TQQQ over the last several months, since the market has gone up and down significantly. Unlike the gold miners, the indices like QQQ have been steadily rising for years, so can we can expect better behavior? I found that the close on June 6, 2018, was only 17 cents off from yesterday’s close on QQQ, so basically the same, and the perfect point from which to measure.

First, I looked at the intraday high of the year, on Aug 30th.
$QQQ up 6.6% from June 6 (175.86 to 187.52)
$TQQQ up 19.1% from June 6 (61.61 to 73.36) *better

This is not surprising, as the move was straight up, and TQQQ performs x3 the QQQ.

Then I looked at yesterday’s close:
QQQ flat at 175.69 from June 6th
TQQQ down 11.7% from June 6th *worse

So, from June 6 until now, TQQQ has suffered from the 3x compounding, while QQQ ended flat.

Looking at a longer time-frame, from the summer highs of 2015:
QQQ up 49.6%
TQQQ up 129.0% *better

What do we conclude? If an underlying has a persistent bullish trend, as QQQ and all the major indices have had since 2009, the triple levered ETF’s will perform better. However, if we enter a period of consolidation, or a bear trend, they will perform more weakly than the underlying.

Taking off a couple of VXXB/UVXY positions

Sold to close $VXXB Mar 15 33.50/28.50 bear put spreads for 3.86. Bought for 2.38 on 2/21.
Bought to close $UVXY Apr 18 56/66 bear call spreads for .51. Sold for 1.61 on 3/8.

SPX 1-dte stopped

#SPX1dte Bought to close $SPX March 13th 2825 calls for .90. Condors sold yesterday for .80. Will be placing a new one today with monthlys that stop trading at tomorrow’s close.

#shortputs CVS March 7, sold…

#shortputs CVS
March 7, sold April 18, 50 put for .86, bought today for .22, thanks Ramie

DG earnings analysis

#Earnings — $DG reports tomorrow morning. Below are details on earnings one-day moves over the last 12 quarters.

Dec. 4, 2018 BO -6.80%
Aug. 30, 2018 BO -0.97%
May 31, 2018 BO -9.36%
March 15, 2018 BO +4.75%
Dec. 7, 2017 BO +2.77%
Aug. 31, 2017 BO -5.43%
June 1, 2017 BO +6.54%
March 16, 2017 BO +0.53%
Dec. 1, 2016 BO -4.96%
Aug. 25, 2016 BO -17.62%
May 26, 2016 BO +4.61%
March 10, 2016 BO +10.66%

Avg (+ or -) 6.25%
Bias -1.27%, negative bias on earnings.

With stock at 121.00 the data suggests these ranges:
Based on current IV (expected move into Friday per TOS): 114.40 to 127.60
Based on AVERAGE move over last 12 quarters: 113.44 to 128.56
Based on MAXIMUM move over last 12 Q’s (17.6%): 99.68 to 142.32
Based on Max UP only (+10.7%): 133.90

Open to requests for other symbols.

SFIX assignment

#Earnings #Assignment #EarlyAssignment #ShortStock
Assigned over half of my position on $SFIX short 25 calls. Closed short stock position for 31.90. Will sell long calls to cancel out loss, and hopefully cancel out original purchase too if I can get the stock just a bit higher.


#ShortPuts – Taking these off a little early as a precaution…

Bought to Close NTES APR 18 2019 190.0 Put @ .25 (sold for 2.90)

Bought to Close NVDA MAR 22 2019 145.0 Put @ .22 (sold for 2.95)

SPX surging

#SPX1dte BTC $SPX March 22nd 2825/2850 call spreads for 10.50. Condors sold for 6.00 on Monday. Had no choice but to close in face of renewed upside warning and strong rally. I’m letting the 2720/2700 put side decay some more, and also added a Partial #ReverseRoll:

Sold SPX March 22nd 2780/2755 put spreads for 3.45.

Now in the hole and will have to choose when to sell a new call spread. Also may need to close today’s 1-dte with short at 2825. Hard to believe it could reach that but after Monday’s 40-point rise we can’t be sure.

“Minor” upside warning

#VIXIndicator Usually the Upside Warning is canceled when we get a Downside Warning. But sometimes, like last Monday, the UpW is canceled by an intraday spike on the $VIX, with no DW taking effect. Usually when that happens, the DW comes within the next few days.

But sometimes, the VIX retreats enough to fire a “minor” upside warning… which is measured on the Fib levels from the recent intraday spike. So three closes below the 78.6% line would fire this “minor” signal.

That will happen today provided VIX closes below 14.44.

This has happened only 6 times since 2000. Below is a chart with the performance of SPX in the days after each “mUpW”, ending at the next VIX spike or DW. You can see that it is mostly positive; even the longest one that goes negative spiked pretty high before rolling over.

Screen Shot 2019-03-13 at 8.01.48 AM


#ShortCalls – Approaching it’s all time low again reached at the beginning of October just prior to the spike to 95…LOL

Bought to Close UVXY MAR 15 2019 52.5 Calls @ .02 (sold for 1.42)


HIIQ STO 3/15/19 38.0 PUTS @.80 Expires in 2 days & 5.5 hrs. ;>)


SFIX STO 3/15/18 33.0 CALLS @.70 NTM