hcgdavis 8:47 am on Thursday, August 15, 2019
Tags: Fuzzy ( 414 )

Rolling just about everything. As…

Rolling just about everything. As I mentioned will not list all my ongoing trades, just list new ones going forward or ones that were listed before I had to drop out.

Tried a directional trade on /ES at the open, lost $700 when my stop was hit.

XBI 82.5 put rolled down to 80 for 9/6 for 0.26 credit. Cb 79.74 if assigned
EOG 85/83.5 #fuzzy rolled out to 9/13 for 0.45 credit. Cb 17.89
LABU 41 puts rolled down to 38 and 9/13 for 0.5, 0.45, 0.55 credits. cb ranges from 37.45-37.55
GILD 65/65 #fuzzy (some of these were on before March injury) rolled for 0.51 credit. Cost basis now 0.53, 3.20, 6.72, and 2.52. A few will be 100% returns and free trades in just a few more rolls.
TQQQ 62.5 rolled down to 60 for 9/13 for 0.67 credit. Cb 59.33

Hope everyone is doing well. I suspect there will be some more rolls before my trades break even or make money.

smasty 9:14 am on Thursday, August 15, 2019

I’ve been doing a lot of collars again in the last few months. I’m structuring these with 45-day short ATM calls and 22-day long puts. The puts are more gamma intensive, and on downturns the calls decay very quickly despite being longer dated, so the combo of high premium ATM calls and high gamma shorter dated puts is doing a good job keeping my cost basis in line with the underlying drops. I’ve thought about posting some of these since they seem to be working out pretty well. Nice you see you posting!
Sue
- hcgdavis 9:19 am on Thursday, August 15, 2019
  
  Sounds like a good plan for keeping money and holding onto gains.
  
  Yes please post an example and good to be back 🙂
- fuzzballl 10:16 am on Thursday, August 15, 2019
  
  When the 22 day long puts expire do you roll the calls out to re-purchase more puts? Is the entire transaction net cash positive? Looks like a great idea!
- smasty 11:45 am on Thursday, August 15, 2019
  
  Hey a couple of my fav guys! So the setup I do initially is buy shares, then sell 45 day calls ATM, and buy puts (22 or so DTE) that cost 33 to 45% of the amount collected on the calls (I try to find puts that cost 1/3rd of the call premium I’ve received)–that way the calls are fully financing the first round of puts, plus some. I try to place the put strike within $2-3 of my underlying. I then figure my max risk is ((share * price)- (put strike * shares) + (put cost * shares) – ( Call cost * shares). I try to size all my share buys for $50,000, and max risk is usually less than $2,000. During big drops like we’ve had, I’ve seen the puts go up 7x. At that point, I take the profit on both puts and calls and roll them down to ATM and back out to a 45 day/22 day type setup. I’ve been able to collect enough to keep up with the underlying price drops. On big down moves the rolling rational is easy and straightforward.
  
  But I have a lot of PEP (I try to focus on big cap names with good yield). I was sitting on Aug 16 puts (127) and Sep 6 calls (130). Last week there was big profit in the 127 puts, which I did not take, but PEP has seen a nice little rally, so I was sitting on puts that expire tomorrow w/ no value. So this is a case where I needed to roll to new, but with volatility up across the board, the put prices are expensive. For PEP I rolled to a 128/125 bear put spread (debit spread), and I will look to cover the 125 shorts as soon as possible so the collar structure with highly defined risk is restored. I do get nervous not having this fully protected, however there is a nice div on Sep 5 that provides almost another dollar of cushion.
  
  The other thing I’ve found w/ this setup (45 day short calls, 22 day long puts)….it is much more div friendly with the short calls. Most people flip the time frames (22 day short calls, 45 day long puts)….I found by not collecting enough on the calls, I wasn’t able to hold shares through div events. Now that I collect a lot more on the calls, it’s much easier to ride through the div events and collect the div. I’ll probably be adding a few more of these in the next couple days, I’ll post the setup and follow it through.
  
  On a side note, my move to Iowa was a disaster! Moving van arrives in 12 days to get me back to Colorado!
  - hcgdavis 1:46 pm on Thursday, August 15, 2019
    
    Unless you like corn and soybeans someone form Colorado was not going to have a great time in Iowa 🙂
    
    A long time ago I did something similar with LEAPS (selling calls and buying puts on the stocks i owned) and on something like IBM you could make 18% with no down side risk. Then the VIX dropped forever and the premiums dried up but it was an easy trade. Put it on after the new year and then not touch it again for a year. Unless it moved a lot then you could take profits on the calls and puts like you describe and reset. Sometimes I would have a good profit in 6 months and would reset around June.
- smasty 12:00 pm on Thursday, August 15, 2019
  
  Just to add…the setup is still net-long delta, so there are P/L swings for sure. But on a 800-share setup, delta might be around 200-250. So there’s a lot of balancing against the long delta of the underlying.
- smasty 1:05 pm on Thursday, August 15, 2019
  
  Here’s one I did right at the close on CSCO:
  Bought 1000 shares @ 46.24
  Sold 10 Sep 27 46.5 call @ 1.70
  Bought 10 Sep 6 44 put @ .56 (exactly 1/3rd the call price)
  Max risk at the onset is $1100 ((46.24*1000)-(44*1000)+(.56*1000)-(1.70*1000)
  Yield is 3%
  Net delta is 258
  
  In the past year I’ve been doing a ton of 13-week Tbill ladders, but now yield is now too low, so my goal w/ these is to get 3-5x the Tbill rate with minimal added risk.
  - MikeL 2:17 pm on Thursday, August 15, 2019
    Assuming CSCO is at $40 on Sep 6th, what would be your next action?
    
    close the puts for a profit
    
    close the calls for a profit
    
    What would be the strikes for for the next trade – puts and calls?