Episode 11 – Second to Nun

So much to stream, including badass nuns, bad crass singers, and terrorists in first class. And, Kevin turns the tables on Jeff with the guessing game. More details and links at https://thepickcast.com

VXX late report

Sometime after the close I got off a risky diagonal on an open order (pressing my luck on this one).
Bought 1 VXX Sep 18 2020 65.0 Call / Sold 1 VXX 07/17/2020 35.0 Call @ 0.25 Credit.
I have no idea how this turns out but the market goes up 4 days out of 5 recently so the short should expire Friday.
If not, it’s an easy rollup.

This also counterbalances my SPY bearish positions

NVAX Call

#coveredcalls
$NVAX STO 7/17 112 call at 2.80

VXX Diagonal Call

Sold 1 VXX 07/17/2020 38.0 Call / Bought 1 VXX 09/18/2020 80.0 Call @ 0.12 Credit.
If the market doesn’t implode this week I should have another free September long call.

TQQQ

#ShortPuts – Starter…

Sold TQQQ SEP 18 2020 45 Puts @ 1.35

SPX 7-dte

#SPX7dteLong Bought to Open $SPX July 20th 3160/3180-3190/3210 condors for 17.40, with SPX at 3183.

My expiration for today looked like an easy winner and then we had the collapse. Now at mercy of the close.

ROKU

#ShortPuts – Cleaned up some scraps earlier…

Bought to Close ROKU JUL 17 2020 115.0 Put @ .03 (sold for 2.33)

CRWD Puts

#shortputs
$CRWD STO 7/17 104 put at 1.35

VIX

It’s up over 8%

How much would it be UP if the market was actually down instead of notching all time highs on the QQQ and big rallies in the other indexes (DJIA up 300+).

SPY

#ShortPuts – Taking a little risk off about 5 weeks early.

Bought to Close SPY AUG 21 2020 250.0 Put @ .82 (sold for 3.13)

SPY Rolls

Bought to close SPY 07/13/2020 312.0 Call / Sold SPY 07/17/2020 313.0 Call @ 0.02 Credit plus a point on the strike

Bought to close SPY 07/13/2020 313.0 Call / Sold SPY 07/20/2020 315.0 Call @ 0.04 Credit plus 2 points on the strike
#SPYLadder

TSLA

TSLA is up over 13% this morning… up almost 80% since the start of July!
Almost made it to 1800 today.
$2000 here we come

VIX

Will Meade @realwillmeade Jul 11
Yesterday at 10:15AM
A trader-hedge fund purchased 13,600 $VIX 8/19 $90 calls for 35 cents
The VIX is currently 27
wow

VIAC Diagonal

Sold VIAC 07/17/2020 25.0 Calls @ 0.20 with the stock at 23.30

SLB Covered

Sold SLB 07/17/2020 19.50 Covered Calls @ 0.09 with the stock at 17.70

FAS FAZ

Second-quarter earnings season starts this week with the quarterly kick-off ritual of reports from the major investment and money center banks.

With the arrival of each bank earnings season comes opportunity with either the Direxion Daily Financial Bull 3X Shares (NYSE:FAS) and/or the Direxion Daily Financial Bear 3X Shares (NYSE:FAZ).
The bullish FAS tries to deliver triple the daily returns of the Russell 1000® Financial Services Index while the bearish FAZ, which is higher by 9.16% over the past month, attempts to deliver triple the daily inverse performance of that benchmark.

Banks faced an array of headwinds in the first half of 2020, including declining interest rates, rising loan loss reserves and the mandate from the Federal Reserve that buybacks be scuttled and dividend hikes be put on hold.
“Goldman analyst Richard Ramsden is more bearish, projecting earnings off 69% compared with last year. On the plus side, with the exception of Wells Fargo (NYSE:WFC), which he believes will report a quarterly loss, banks are apt to avoid dividend cuts,” reports Barron’s. “Still, banks will be hurt by higher reserves, which he expects to hit $32 billion, 27% over last quarter.”
Reading through the tea leaves of that assessment, it would appear that the bearish FAZ has a chance to shine this earnings season. Potentially bolstering the case for FAZ is that bank stocks, though still inexpensive relative to the broader market, aren’t quite the value plays they were 12 months ago. “Even with the recent increase in stock prices, the median North American financial sector stock still trades at an 11% discount to its fair value estimate but below a 30% discount a quarter ago,” according to Morningstar. “With our assessment that many financial sector stocks are less undervalued than they were a quarter ago, investors should be much more discerning of which stocks they choose and cognizant of the risks they’re taking.”

Something else to consider when it comes to the FAS/FAZ decision is that the Russell 1000 Financial Services Index isn’t a bank-specific benchmark. It includes insurance providers and asset managers, among others and some of those companies aren’t all that inexpensive, either.
“Outside of banks, we see fewer bargains in the financial sector. The investment-management firms we considered undervalued at the end of the first quarter are mostly fairly valued after the run in the stock market,” notes Morningstar. “The median North American insurer we cover also trades at around an only 8% discount to its fair value estimate, which is a relatively small margin of safety, given the insurance industry’s exposure to interest rates, asset prices, and tail risk of large insurance claims from the pandemic.”

VXX Diagonals

Partially restoring my diagonal puts that expired on Friday on the open
Sold 1 VXX 07/17/2020 30.50 Put @ 0.49
Sold VXX 07/17/2020 30.0 Puts @ 0.32
VXX opened at 31.81

#fuzzyhotair #putratioladder Hi Guys! I…

#fuzzyhotair
#putratioladder

Hi Guys! I had ankle repair surgery last week….boy it’s been tough! Lots of pain and living on one leg! But was finally better enough this morning to add to my AAPL put ratio ladder. Adding on an up day like this….maybe not the best, but a 46 DTE expiration opened up this morning. (quick recap on my process: 1. delta 30/25 1×2 credit ratio 2. At the BE of that ratio I place a BWB (otherwise known as a venus fly or sumo fly) to extend the BE down a few more delta).

Week 1: Aug 21 345/340 1×2 credit ratio for 6.70 with a butterfly hedge
Current price: $3.375
Break even: About 319.60

Week 2 (placed today): Aug 28 372/365 1×2 credit ratio for 7.12
Butterfly hedge: 350/340/335 for .90
Break even: About $340, about 14 delta

The week one trade has realized 50% profit as of today….I’ll leave it sit a little while longer.

WFC Earnings

Sold WFC 07/17/2020 29.0 Diagonal Calls @ 0.24.
I also have a covered call position at the same strike.
Also
Sold WFC 07/17/2020 24.0 Puts / Bought 08/21/2020 20.0 Puts @ 0.20 Net Credit
Stock at 25.32 w/ Ann. Div. Yield $2.0400 / 8.01% and the 52-week low at 22.00

AAPL

#ShortPuts – Pure insanity….let’s add this:

#TakeOneForTheTeam

Selling prior to earnings. If AAPL gets back to this there should be lots of other nice opportunities showing up also.

Sold AAPL JUL 24 2020 370.0 Put @ 2.30

ADS Covered and diagonal

Sold ADS 07/17/2020 47.0 Covered Calls @ 0.40
Also
Sold 1 ADS 07/17/2020 45.0 Call / Bought 1 ADS 09/21/2020 70.0 Call @ 0.25 Net Credit.
Stock at 41.39

OLED

#ShortPuts – Selling week before earnings at the expected move and well below the 50ma.

Sold OLED JUL 31 2020 145.0 Put @ 2.90

EWZ

#ShortPuts – Starter position…

Sold EWZ AUG 14 2020 28.0 Puts @ .71

AAL

STO $AAL Aug-21-2020 14 #CoveredCalls @0.92. Basis now 11.96. Stock @11.62.

CC Strategy/Activity Jul 10

Options added to profitability in 24 of 28 positions. Overall large gains in stock price in DXCM, AMAZ and SDC create a loss on the options. Covered calls most successful in most conservative account (Schwab 401(K)) where they generate almost 50% of the profit.

P/L from stock and option does not always equal net P/L due to contribution from dividends.