First time looking at the…

First time looking at the market today. That is what a short covering rally should look like 🙂

Oil trades

Taking some profits out of /cl and freeing up margin.

60 DTE 58/91 strangle BTC for 0.25. Had been sold for 0.42 but I rolled the put side down costing 900 so profit was $150 in less than 2 weeks.

30 DTE 60/84.5 stragles BTC for 0.18 sold for 0.22.

So made back my losses earlier in the year and am now + on /CL for the year by $200. Hey at least it is positive.

But here is something to think about. I re-read sections of the option sellers book, they mostly focus on selling futures options and they had 56% returns last year verified. Most years they do 40-50% and a lot less trading than most of us. They like to start ladders 90 DTE and each month add new rung.

The premiums are huge on futures. The issue is not a lot of weeklies and harder to roll. But looking at oil today the 93 DTE 58/87 or roughly delta 7-8 options. Can be sold today for 0.72 credit. Oil is $10 per 1c move per contract. So a 10 lot is $100 per 1 cent move.

Anyway at 60 DTE it has already decayed to 0.50-0.53 by 60 and 0.12 at 30 DTE. So the largest drop occurs from 60 to 30 days but the drop from 90 to 60 days is not chump change. Also can be farther OTM which usually requires less adjusting. So a 10 lot would bring in $7200 cash minus commisions and could buy it back roughly 28 days later for $5300.

At 60 days the options are roughly delta 5s and by 30 they are down to 2.

I am starting to look at this again but only for regular accounts with margin. Will not let you touch futures options in IRA etc.

I may put a 1-2 lot on /CL 93 DTE today just to watch it happen in real time.

Moving #fuzzy around. MU has…

Moving #fuzzy around.

MU has been a dog. Way below original strikes. 2021 LEAPs are out so first I attempted to roll out the Nov. 15 50 call out to Dec which brought in 0.55 credit.

Then rolled my long 55 LEAP 2020 out to 2021 and down from 55 to 40 for debit of 8.35. So I gained 15 points of down side for only 8.35 and another year to manage.

Then I did not like the 50 calls so I rolled them down and closer, 45 strike 32 DTE for 0.19 credit.

After all that My new cost basis is 16.28 and have 823 days to manage. So only need 0.13 per week to scratch it to zero.

Hopefully the VIX stays up…

Hopefully the VIX stays up while the market stabilizes. Good premiums, I see some good #pietrades (back to weeklies) if I can unwind a few positions or generate some cash on rolls.

Went for bike ride, everything…

Went for bike ride, everything had turned green. Came home thought there may be a double/triple bottom forming then it looks UGLY now!

Really wish I had kept the hedge insurance on, but way too expensive now.

Updates rolls and adjustments, just…

Updates rolls and adjustments, just trying to pull some cash out of the market until it stabilizes. Paper losses are high but everything hedged so as we approach expiration the paper losses will improve.

#shortstrangles
/CL added 34 DTE 60/84.5 strangles for 0.22 credit. On oil I have finally figured out the best way to trade it is take profits early, re-enter later if you want back in. Adjust early if it is going against you. The theta decay is wicked fast. 5 contract strangles is roughly $100 a day in decay so as long as it stays in your range you can take some profits early. Closed previous strangles last night for $900 profits in 9 days even with oil moving. Just reset the strangle this morning.

#fuzzy
WDC 60/58 LEAP cost basis 15.41. Sitting on this until closer to expiration.
MU 55/50 LEAP cost basis 8.67 so not expensive but MU has SUCKED. I will adjust it once the short options are under 0.2, soon I suspect.
EOG 115/120 put leap at 14.88. May adjust back 115 depending on where it is at expiration.
EXPE 125/125/126 LEAP cost basis 14.88. Just waiting for theta decay to kick in.
LNG 50/66.5 LEAP cost basis 17.24
XBI 95/97 LEAP adjusted to 95/95 for 0.25 credit. CB 3.37 and 99 days left to manage but this is red on paper.
87/95 LEAP cost basis 4.33 and same as above
95/95 LEAP cost basis 0.85

#pietrades
TQQQ lot 1 65 cc rolled down to 63 CC and out to 22 DTE for 1.4 credit. CB 60.65
TQQQ lot 2 65 CC rolled down to 63 same as above. CB 61
LNG lot 1 66 CC rolled out 8 DTE for 0.53 credit. CB 63.07
LNG lot 2 66 CC rolled out 8 DTE for 0.63 credit. CB 63.63.

Biggest paper losses are the 401k as it is half bonds and half stocks but I can’t trade my way around the dip in those. My 6 trading accounts are not doing too badly 🙂

Just a few observations, my accounts that are much more concentrated are doing better. Not saying put all your eggs in 1 basket, but 1 basket is certainly easier to watch and adjust.

Aggressively collecting income and rolling options helps keep cost basis down and brings in cash even when the market dumps. Also helps offset bad timing.

Picking the right horse makes a difference. I am going to pay a lot more attention to sector rotation. My oil and gas trades are saving my bacon at the moment.

Hope everyone is doing ok with this and has some cash for when a floor is put in 🙂

Did a hedge fund or…

Did a hedge fund or something blow up? The last few days are obviously not retail selling. I did not see any news about a fund crashing but that’s what these candles look like.