SMH STO the 4/26 100.5 put for 1.02. Ironically the 101 was selling for about the same so an extra 50c of downside for a few pennies. Plan to close in 3-4 weeks at 50%.
Author Archives: hcgdavis
ERX 21.50 cc assigned early…
ERX 21.50 cc assigned early last night. Reopened for 4/5 23 cc at 22.31.
Don’t know about the rest of you, but I have been assigned early on about 40% of my positions lately, even when there is still time value left.
#markettide V3 is out. Does…
V3 is out. Does not appear to be a huge resource hog as Bryan initially told me. However, appears less sensitive so you may have to change the ATR settings if you want it to pick up all the pivots.
Default is 0.50 upper but I am trying 0.25 for a while. More sensitive but will be trading full time for a few weeks.
Hello bistro, my fun ski…
Hello bistro, my fun ski day March 7 turned into a trip to UMD shock trauma so have been out of work and trading for a few weeks. However, I am home another 4 weeks and plan to trade as actively as I can, kind of a test run for full time trading when I retire someday many years from now.
Won’t bore or gross you out with the details, but a collision with another skier (they are ok from what I have heard) sent me face down into the snow from a jump in the terrain park at the end of the day. It subsequently broke my nose (7th time) and 6 other bones in my face. Fortunately my brain and spinal cord are fine and the helmet did its job. But it took a 4 hour surgery and 4 titanium plates in my palate and sinuses to put me back together.
Anyway, my jaw is wired shut for 4 more weeks so I can’t talk which is required for my job. So I am home recovering and will be trading while I burn through my vacation time, fortunately had enough to cover it.
With that said, I needed a bunch of cash so STO EXPE 43 DTE on last Thurs. 115 put for 2.10 in a larger account. My goal is to close it for 50% profit in 3-4 weeks. Tastytrade style.
One of my goals going forward with trading is to target certain trades for certain requirements. With that said, #pietrades will still be the bread and butter, but I occasionally will sell something farther out and OTM mostly to pull the cash out of the account and use it for certain expenses.
Other trades I have on, sorry some of the dates are hazy. I traded some prior to surgery but my vision was fuzzy and my judgement was slightly impaired. Fortunately does not look like I did anything stupid.
Assigned 300 shares EOG over the weekend at the 96 put but cost basis 93.03. STO 3 march 29 90.5 calls at 1.24 this morning. Will manage aggressively. Cb 91.79.
GILD rolled the 70/70 #fuzzy down to 65/65 for debit but cost basis 8.41.
TRIP 52.5 CC for this week cost basis 52.33.
ERX 21.5 cc should assign this friday at cost basis of 20.28.
TQQQ i rolled both batches to 54.5 CC with cost basis of 56.39 and batch 2 53.5 cc for 56.75 and somehow have a third batch now at the 55 cc for 53.79 cost basis.
XBI #fuzzy 80/80 was assigned early on half. Closed and rolled 1/2 the short side up to 91.5.
FAS 57 cc cost basis is 54.20 and will let assign in 2 weeks.
GILD 67.5/67.5 #fuzzy rolled down for credit. Cost basis 6.11.
EOG batch 2 88.5 cc at 92.83 cost basis.
Hope everyone is doing well 🙂
Learned a few life lessons from this but not sure if it will help trading, will see.
Updates
#pietrades
EOG batch 1 96.5 put rolled out next week to 96 for 0.16 credit. Cb 93.63 if assigned.
EOG batch 2 96.5 rolled out a week for 0.43 credit. CB 93.91 if assigned.
LNG 65.5 rolled out next week to 65 for 0.12 credit . Cb 63.59 if assigned.
TRIP 54 CC. Was assigned early Tues night so sold the 54 cc for next week for 0.96. Cb 53.03 and will let assign if ITM.
XBI 83/86/87 #lizardpies closed for 0.97. Total credit 3.22 over 3-4 weeks
AXLN 125/131/13 #lizardpies closed for 1. Total profit 1.37 over 3 weeks. It took off to the upside.
QQQ 171.5 sold for 0.75.
SQ 75.5 put STO for 0.83 credit for 3/8.
EXAS 3/15 87.5 put sold for 1.15
ERX 22 cc rolled next week for 0.3 credit. Cb 21.23
TQQQ 54 cc at 56.79, need to stay ahead of the rolls.
FAS 57 cc rolled for 0.40 cb now 54.77.
TQQQ 52 cc at 57 cost basis. Will be rolling.
#fuzzy
GILD 70/70 rolled for 0.24 cb now 7.48.
GILD 67.5/69 cb 6.51
LNG 50/60 rolled for 0.44 credit. Cb 12.49
XBI 80/80 rolled for 0.27. Cb 12.29.
Busy few weeks. Sun is out, headed outside.
Updates
#markettide Spoke with Bryan this morning. They are rolling out version 3 either this week or next. He told me it maxes out TOS so if you have a slower computer like my laptop you may be better off staying with version 2. However version 3 is supposed to have scanning and my desk top has the power to handle it. He also said thanks to everyone at the Bistro that picked it up. The scanning should give live time signals!
#pietrades
ALXN Rolled 2/22 #lizardpies to 125/129/130 for 1.42 credit. cb 123.88 if assigned
EOG 98.5 put rolled down to 96.5 for 3/1 for 0.50 credit, batch 1. Second batch went through at 0.15 (tradestation issues). Cb 94.28 if assigned. Earnings next week.
LNG 65.5 put rolled earlier in week. Cb 64.21 if assigned
TRIP 57 put rolled out to 3/1 for 0.35 credit. 53.99 if assigned. If still ITM this week will roll it out 43 DTE and down.
XBI #lizardpies rolled out to 3/1 and adjusted to 83/86/87 for 0.30 credit. Cb 82.40 if assigned.
ERX 22 cc 3/1 for 21.53 debit and cost basis.
TQQQ 54 cc in 3 weeks at 56.79. Trying to stay ahead of the rolls until break even then will let it assign and start over.
TQQQ 52 CC at 57.00. Same
FAS 56.6 cc rolled up to 57 3/1 for 0.40 credit. Cb 54.77.
EOG batch 2 rolled out to 3/1 for 0.15 cb 94.34 if assigned.
#fuzzy
GILD 70/70 rolled out 43 DTE for 0.24 credit. cb 7.48.
XBI 80/80 cb 12.56
LNG 50/60 cb 12.93
GILD batch 2 67.5/69 rolled out 43 DTE for 0.45 credit. Cb 6.51.
Tradestation 10 has some huge memory requirements, that was my issue with it not working. I spent 2 hours with Tech sorting out the issues. Bottom line, you need a 10gb memory chip to run version 10. If you don’t have that stay with version 9.5 and they will continue to support it. Option station pro requires less power on that version as well. However, you have to uninstall all previous version and re-install it for the 9.5 version to work correctly. Ghost files from the other version interferes.
I am trying to figure out a way to separate my accounts from the service accounts. May take me a little while to figure out an easy template. In the meantime will probably only have time to post on the weekends. Once I can easily separate them should be able to update on a more regular basis.
Also will be doing more buy writes for #pietrades depending on directional signals. Better returns than just selling puts if I have a upward bias. The other option is more ATM or ITM puts if I think it is headed higher.
Hope everyone is doing well and staying dry or at least having fun with some snow:)
Just wet here.
#pietrades LNG 3 DTE 65…
LNG 3 DTE 65 put rolled out to 10 DTE and up to 65.5 for 0.73 credit. Cb 64.21 if assigned.
Just a thought for anyone…
Just a thought for anyone thinking about shorting the market now, I heard somewhere yesterday that there is a record amount of cash on the sidelines. As they pile on market highs that will squeeze out any shorts lefts.
Just an FYI.
#optionsexpiration a day early. Some…
#optionsexpiration a day early.
Some of these trades are from yesterday, have been to0 busy at work to post.
#pietrades #lizardpies
ALXN 120/129/130 for 2/22 for 1.25 credit yesterday off an 0.85 roll the previous week.
EOG 98.5 put for 96.75 cost basis off a roll
LNG 65 puts for 2/22 STO yesterday for 0.56 credit
TRIP 57 puts for 2/22 for 0.66
XBI 84/85/86 total credit now 4.19. Have been rolling 3 weeks.
TQQQ 51 CC rolled out 43 DTE to 54 CC for 0.25. Cb now 56.79
TQQQ 51 cc rolled out 43 DTE to 52 for 0.10 for cost basis of 57.00
FAS 1 DTE 56.5 cc rolled out 8 DTE for 0.47 credit. Cost basis 54.17
EOG batch 2 98.5 8 DTE cost basis 97.1
#fuzzy
GILD 70/70 cost to 7.72
XBI 80/80 rolled for 0.56 credit. Cb 12.56
LNG 50/60 rolled for 0.33. CB 12.93
GILD 67.5/69 rolled for 0.26 cb 6.93.
Finally some consistent results last 4 weeks. Of course the market screaming higher does not hurt. But mostly I was able to unwind a bunch of accumulated rolls and finally pull some cash out of the market again.
Since Jan 1 have been officially working with the advisory service. Obviously I cannot post those trades but will keep posting other trades I find and really like how many of us here are willing to experiment with different tactics to see what really works the best with real money in real time! This is a great trading group and I will stay involved, thanks to many of you I survived the 20% correction which now seems to be over and even came out ahead. This down turn was WAY better than the SVXY debacle last Feb. 6 2018, not that anyone here needed reminding 🙂
One thing is certain, I will be keeping a general market hedge on now all the time. May only need it once or twice a year but then it is a lottery ticket. To keep it from costing too much will probably use a back ratio or risk twist trade. Will set it up to cover a 10% correction. Anything beyond that it becomes a mega lottery ticket.
Cheers, Chris
#fuzzy GILD 70/70 10 DTE…
#fuzzy
GILD 70/70 10 DTE rolled out to 31 DTE for 0.28 credit. Cost basis down to 7.72. Hoping to have it to zero by the summer.
#pietrades STO the ALXN 2/15…
STO the ALXN 2/15 118 put for 0.85 credit. Could probably get more now. 117.15 cost basis if assigned but more likely will roll.
#fuzzy EXPE, after the huge…
EXPE, after the huge gap up after hours, 9 points yesterday it was up only 3 around lunch time today. My short 126 puts that were 4.75 and short 120 puts were at 1.75 both crushed to pennies. My leaps maintained their values. After several months of adjusting out for 16.23 and 13.97 credits. Cost basis was 9.43.
Some days lucky is better than good and I will take it. This was a huge winner after being flat since Oct.
Now I have a bunch of cash and will look for trades over the weekend for Monday.
Expirations, rolls, etc.
#fuzzy
EXPE have the 120/120 and 125/126 expiring tomorrow. Cost basis 9.43. It is really holding onto the time value, I have over 5k of theta decay on this position alone. Should crush with earnings tonight and either way it swings this trade is up huge and will close all of it tomorrow then reset. One of my biggest winning trades so far, especially from a recovery standpoint. Down a lot earlier this year, up 17k+ now 🙂
GILD 70/70 adjusted earlier this week. Cb 8.00, I miscalculated below.
XBI 80/80 rolled out to next week for 0.42 credit. Cb 13.13
LNG 50/60 cb 13.26, adjusts next week
GILD 67.5/69 rolled another week for 0.41 credit. cb 7.19
Some of these trades should be scratched in another 2-3 months, I hope, then have pure income.
#pietrades and #lizardpies
SQ 68 put rolled up to next week 70 for 1.11 credit. Cb 68.89 if assigned but will be out before earnings.
EOG 98.5 rolled out 15 DTE for 0.67 and 0.3 credits. Cb 96.78 and 97.1 Tradestation having issues with option station pro. However, if you call them they will not charge you for the broker assisted trade.
TQQQ 51 cc cb 57.04. Will roll aggressively
TQQQ 51 cc cb 57.10 same
FAS 56 cc rolled out 1 week and up to 56.5 for 0.13 credit. cb 54.64
Hope everyone has a good expiration, volatility back today I assume because of the idiots in DC comments on the trade wars.
#fuzzy MU STC the 35/35…
#fuzzy
MU STC the 35/35 for 7.38 credit. Total loss of 6.92 but I am now out of my biggest losers. It could have been much worse, it was down 25+ points at one point.
Everything left is solidly in the green EXPE, GILD, XBI.
Also today is the anniversary of the SVXY implosion and my biggest trading losses ever. While I still have a long way to go to break even on cost basis and even further to hit all time highs, the tactics we have been developing since then have been account savers for fixing bad trades. Thanks everyone for the input and by all of us trying new techniques I think we are all able to handle volatility better and even profit more from it. Keep up the good work!
At least 2 accounts are about to hit all time highs, 4 to go.
I have a bunch of cash now and will be adding some trades tomorrow.
#fuzzy GILD 70/70 expires this…
GILD 70/70 expires this week rolled out 2 weeks for 0.48 credit. Cb now 8.95.
#pietrades STO EOG Feb 8…
STO EOG Feb 8 98.5 put for 1.10. Cb 97.4 if assigned.
Another batch of 3 in another account for 1.05 or 97.45 if assigned.
#fuzzy
WDC so far ITM now that can’t roll. Closed the 40/40 for 6.45 credit resulting in 11.26 loss per contract. However, this is much better than if I had held the stock, would have been a 74 point loss as I originially had sold the 100 and 98 puts before Oct.
I will take the cash and use it for a better trade 🙂
#lizardpies XBI decayed enough I…
XBI decayed enough I rolled it to an 83/83/83.5 jade lizard for 1.59 credit. cb 81.41 if assigned.
#optionsexpiration, adjutements, rolls, new trades…
#optionsexpiration, adjustments, rolls, new trades
#lizardpies
XBI 78/82/8.25 should expire tomorrow for 1.26 profit per contract
AMAT BTC the 39 puts for 0.29 that expire tomorrow. Sold for 0.71 last week. Tradestation so can’t trade until tomorrow. I think I will replace it with a #pietrades 108 CC on IBB currently for around 106.89. Obviously that will be different tomorrow.
FAS STO 56 cc for 54.77 expires in 8 DTE
TQQQ batch 1 50 cc rolled out 22 DTE to 51 CC for 0.26 credit. Cb now 57.04 and will have to stay ahead of the rolls.
TQQQ batch 2 50 cc rolled out 36 dTE 51 cc for 0.55 credit. Cb 57.10 and same as above.
#fuzzy
LNG 50/60 8 DTE rolled out to 22 DTE for 0.3 credit. Cb now 13.26
All the others were updated and expire next 1-2 weeks.
Back to even from the start of the October volatility. Now keep working on getting back to even from SVXY losses. Expect at least another 12-24 months unless everything goes perfectly, hahahaha, yeah that would happen 🙂
Something I noticed about #fuzzy over the last 3-4 months. As long as you keep rolling and generating cash they seem to withstand market volatility better than many other trades. In a few small accounts, I generated almost 50% of the value of the account in cash over that time even though the paper value was steadily declining. Have to agree with @fuzzballl, they are flexible. However, going forward I think I will take profit and then reset as we discussed earlier. I think it would make management easier and also lock in profits and also allow you to move the strikes more effectively as the market moves.
#rolling, adjustments, and new trades…
#rolling, adjustments, and new trades
#fuzzy
MU rolled the 35/35 out 16 DTE for 0.5 credit. Cb now 14.30
WDC 40/40 rolled out 9 DTE for 0.33 credit. Cb now 17.71
I was going to close these at a loss but figure if I can get at least 0.25 per roll will keep rolling to generate cash and lower cost basis. 10 contracts each so decent income.
#pietrades
SQ STO the 9 DTE Feb 8-9 68 put for 1.53. Decided not to jade lizard until after FOMC and see what the market does. If we gap up I will sell the CCS once it has a top or range.
FOMC must have just released up 10 more on /ES. I may #jadelizard SQ into the close if it slows down to the upside.
After 4-5 months of crap trading, finally making some income/cash and money again but I still have a long way to go to recover the SVXY fiasco.
#fuzzy WDC 40/40 rolled out…
#fuzzy
WDC 40/40 rolled out 7 DTE for 0.45 credit. cb now 18.04.
#pietrades
AMAT 7 DTE 39 puts sold for 0.71 credit. Cb 38.29 if assigned. Smaller account so only 3 contracts.
Hoping the bottom on the chip sector holds but will roll or take assignment if not, true PIE style.
Holding on further #spycraft at the moment until we figure out the best defense, market is moving more than the options are priced for.
Clearing the decks/resetting several accounts
Obviously what I have been doing the last 4 months has not been working. Hit all time low balance again Jan. 4 this year. So I am going back to what works and has been proven through several market cycles and rebuilding the equity curve. At least last month have recovered and higher than the Feb. 6, 2018 SVXY losses and lowest balance from then.
So I am clearing out losing trades, closing a bunch of #fuzzy, some at profit, some at loss, and re-deploying capital. My trading will mostly consist of #pietrades, #lizardpies, #spycraft and the occasional directional play/scalp and a few #fuzzy
Some closings today, but have 2 more weeks to clear out the primary account.
#fuzzy
EOG 110/110 closed for 5.16 loss per contract. It is so far ITM can’t get decent premiums anymore. My intial loss was 17 so this tactic works.
EXPE closed the back ratio credit spreads, left with 120/120 and 125/126. This is sitting on a profit and will close it over the next 2 weeks as the shorts expire. Cb 9.43 and right now can close for min. 11.45. another week of decay that will be better. Lost $600 on the credit spreads after butterflying to control risk (could have been 2000).
MU 35/35 now ITM Cb 14.80 and will roll next week.
WDC 40/40 cb 18.49 and waiting for the short to implode after earnings today.
XBI 80/80 cb 13.97
LNG 50/60 rolled 15 DTE for 0.5 credit for 13.56 cb.
GILD 67.5/69 rolled 15 DTE for 1.3 credit. Cb 7.60
#pietrades and #lizardpies
XBI 78 put 82/82.5c 8 DTE for 1.26 credit
TQQQ 50 CC rolled out 15 DTE for 0.45 credit. CB 57.56 so will manage aggressively
TQQQ 50 cc lot 2 cb 57.30 same
LNG STO the 8 DTE 63 put for 0.92. CB 62.08 if assigned. LNG is my best performer for the year so far 🙂
#spycraft
Batch 1 closed for a $214 loss after the back ratio adjustment did not work. SPY reversed.
Batch 2 closed for a $344 profit, but only because tradestation messed up and sold 20 contracts of the put side instead of 10 so even with the back ratio that did not work I made a few $. Now I am on hold in this account until tomorrow. Tradestation does not give you credit for closed trades until after midnight so I only have $614 buying power in this account until tomorrow morning. Another reason I prefer TOS over TS.
What I have learned most recently.
#fuzzy works well but I think the real value of them is to close them once you have a profit. The EOG trade would have worked if I had just closed it early. If you still like the trade, reset the strike prices. I will use these as shorter term trades out 1 week or a month, take my profit and reset. Commissions are cheap enough to do that most of the time. A 6 % return in one month and then resetting is 96% annualized. Instead of trying to take the cost basis to zero will just take profit and reset. Will probably just use a 90 day option for the long side.
#spycraft
I think the best adjustment when the short strike is challenged is to butterfly it. You can set a defined p/l by broken winging it and skewing it if you have a bias. Just to stop losing can simply butterfly it. Seems to be the cheapest way to do it and least affected if it reverses. Yes you may lock in a loss, but much better than a full loss on the credit spread.
#pietrades and #lizardpies
Upside directional bias set it up as a synthetic long.
No directional bias, set up as a straddle jade lizard.
Downside directional bias set it up as a strangle jade lizard.
But I think setting it up as a jade lizard initially gives more flexibility in managing because of the extra credit. I will be doing A LOT more of these.
Can also leg in and out depending on how the stock moves.
Pouring here so going to work out in my garage gym. First bike race is in 8 weeks so need to lose 10 pounds and make friends with my fast again 🙂
Hope everyone has a good expiration!
For some reason the reply…
For some reason the reply button is not working for me at the moment.
Adding to @jeffcp66 and @kathycon discussion below on SPX/SPY/ES credit spreads below, the idea is to get a directional kick if the short strike is violated. Sometimes it works and you get a good profit spike. From what I did with #spycraft the other day, not looking so good today but I did not have time to adjust. Hoping for a snap back rally tomorrow.
The way I see it there are 3-5 adjustments that may work most of the time, none are going to work all the time.
1. delta neutral buy back half of your short strikes. Works great if it keeps moving, not so much if it reverses like it has for me.
2. delta neutral, buy some options between your strikes. Same as above but probably a little cheaper and the same problems as above.
3. just closing it down at a certain loss level or closing it early. You could also roll out and up/down but may be hard to get credits if it has already moved that much.
4. butterfly, either BW or regular. This is probably the cheapest and can be skewed but then will have loss on one side, but fixed gain or loss on the other. At least you stop the bleeding at that point and lock in your gain/loss.
5. convert the short side to a calendar or diagonal like a #fuzzy and then manage from there but then you may be in a position a lot longer than you want.
Final decision up to you but I am going to keep experimenting with all 5 options to see if there is one that always works the best. Like @kathycon I think the butterfly will be the most efficient. Once on you can leave it alone and let it expire. Everything would cancel out.
#spycraft Closed 5 of the…
Closed 5 of the 10 short 266 calls for the Feb 1 expiration for 3.49. The new Tradestation screens apparently put my orders in last week twice, so I ended up with 20 contracts instead of 10 on the put side. It is doing well so will leave them but I don’t have the margin for the ladder now. So anyway, sitting on my hands on this one until next week.
Once I can close the put side will re-ladder.
However, I don’t really see any reason to sell the call side at the moment so will just open the put side and leg into the call side later. If you are going to iron condor I would skew to the upside a lot. Looks like there is panic buying now.
So now have 20 contracts of the 245/242 puts, 5 of the 266 and 10 of the 269 call side. Keep on rallying. Cost 3.49.
I also adjusted the other account. It is now the 242.5/240.5 put spread 5 of these and 3 of the 268/ and 5 of the 270. Cost 2.38 to close these.
I figure if we can keep rallying will be a winner. If not can resell on the pull back.
Ladder on 1 account STO the Feb 8 255/252 put spread for 0.21. 10 contracts
No point in adding the call side until we have 2 sided action again.
#spycraft Making some adjustments to…
Making some adjustments to the call sides in SPY and EXPE. Too busy to post the actual trades at the moment, just trying to get them through. Will update later.
Looks like we are back in slow grind higher mode everyday.
EOG
Closed out the inverted fly at 97/98/99 that had been converted from a violated credit spread for 0.11 debit. After all said and done made $464 on 10 contracts.
Still have the 110 #fuzzy to manage.
#spycraft Just opened Feb 1…
Just opened Feb 1 expiration IC at the 245/242 puts for 0.25 credit and the 166/269 calls for 0.39 credit. Could probably get about the same now.
WDC rolled the 4 DTE 70/70 out a week for 0.62 credit. Cb now 18.49.
The #spycraft trades will be managed as per the discussion last week. Hard adjustment points as soon as the short strike is breached or if in expiration week closed for a small loss or rolled. As long as we have 2 or more weeks left to expiration will back ratio.
#spycraft Opened leg 2 of…
Opened leg 2 of the IC. STO the 21 DTE 268/270 ccs for 0.24. Now have the 242.5/240.5 and 268/270 IC for 0.44 credit.
I will open another batch on Monday after some stocks are finally called out.
Every Thur. or Fri. add another rung to the ladder but with so many SPY expirations you can do M,W, or F.
Finally unraveling some trade adjustments…
Finally unraveling some trade adjustments over the last 14 weeks and bringing in some profits again. Have been flat for 3 months but a very nice week today 🙂
#fuzzy
EOG 110/110 with the back ratio ccs wrapped around it from the other day. With the slight pull back this morning I was able to sell 5 99 calls for 15 DTE for 1.97. What this did was lock in a no loss trade on the credit spread. Original trade was the 97/98 ccs. Back ratioed the other day. With todays trade I locked in a gain of $25 total if it closes at 98.02. Anywhere above 99 or below 97 that expands to $505. Basically inverted a butterfly but because of the gains from the back ratio now have that part of the trade risk free.
After the original post, rolled the 22 DTE 110 put out to 43 DTE for 0.45 credit. Cb now 13.96.
EXPE 120/120 125/126, 117/118 ccs and 118/120 ccs at cost basis of 9.43. Managing same as EOG. Any of the short strikes breached will delta neutral hedge (usually buy back half of the shorts).
GILD 70/70 cb 8.48. Will roll in 2-3 weeks.
MU 35/35 cb 14.80 and will roll 1-2 weeks
WDC 40/40 cb 19.11. Roll next week. This will be the longest to recover. Good thing I have a lot of time.
XBI 80/80 at 13.97 rolls in 2 weeks.
LNG 50/60 1 DTE rolled out 15 DTE for 0.48 credit. Cb 14.06
GILD 67.5/69 cb 8.90 and rolls in 2 weeks
#pietrades
LNG batch 1 61 CC should be assigned tomorrow at 57.70 cb
LNG batch 2 61 cc should be assigned at 58.53 cb.
#lizardpies
SQ should expire for full profit tomorrow. 667.50 profit on 3 contracts in 2 weeks. Finally an easy winner chicken dinner.
#spycraft
22 DTE 242.5/240.5 pcs for 0.20 credit. Small account so only 5 contracts. However, once batch 1 LNG expires this is one of the accounts I will re-dedicate to #spycraft with the mechanical management rules. Trying to double the 2 accounts in a year. Easy to keep track of since the new year.
I will be legging into an out of a lot of trades now. Anytime I can lock in a gain will do it. No guessing about what to do when short strikes are violated, they will be delta neutral hedged or shut down at a minimal loss, no questions asked. After looking at 4 years of #spycraft trades, controlling losses was the number 1 way to make this tactic profitable. The other way appears to be applying some timing by legging in and out of sides.
Being mechanical and following my own rules.
EOG 97/98 16 DTE credit spread was breached on the short side this morning. I delta neutral hedged it by buying back 5 of the 10 contracts at the 97 strike . Actually could have done 3 but was in a hurry. Price was 3.1 after I had sold them for 1.48 last week. The math is complicated because I now have a 5 short: 10 long ratio against a put #fuzzy but looks like anything above 99.04 and I break even or make money. If we drop I can always sell 5 again to take the ratio back to 1:1. Since doing that I am up $1635 on the credit spread part this morning.
I will be doing this with any breached credit spread going forward based on the TT research that showed violated credit spreads rarely return to the original range. As long as there is more than a week left to expiration. If inside that would roll first out to 21 DTE or so and then back ratio.
EXPE STO 10 of the 23 DTE 118/120 CCS for 0.40 against a 20 contract put #fuzzy.
Will start some #spycraft on Monday once my LNG and XBI cc are assigned.
#spycraft version 3.2 Ok guys…
#spycraft version 3.2
Ok guys (and gals). I did a bunch of research over the last 2 weeks. With the market volatility I wanted to restart these trades and also want the consistency back. My trading has been all over the map the last 14 weeks. I used to belong to a service that used this tactic exclusively but I dropped out after I thought I knew everything there was (wrong I still could not contain the max loss trades). Anyway, I was able to find results and trades going back to 11/14/14 to present. I had most from the service up until last year but was able to find a track record up to just a few weeks ago. I will spare you the details but the numbers are still impressive and include some wicked volatility spikes. I looked at every trade and if I had questions about the close used thinkback to see where prices were for opening and closing. Yes it was a lot of work but worth it.
Trades were placed every Friday during that time.
A total of 6 losing trades over that time but only 3 went to full loss. You can probably guess the dates (2 in August and 1 in December of 2015). Surprisingly Feb. 2018 did not result in a loss. The other losses were shut down early and I think that is what saved the service from having major losses. There were a few that were closed early either for a scratch or only a few pennies within the opening price.
Over that time the trades made 563.2% total returns.
78% annualized returns.
93.9% win rate, expected win rate was only 84% confirming what a lot of TT has proven. There is your “edge”.
So anyway I am restarting these in 3 smaller accounts, all under $7500 and one with only $1500 with the goal of doubling the account yearly.This most recent year they had 299% returns. I plan to manage it very mechanically but there are other options for those that want to do it differently.
Here are the rules and some guidelines to be consistent and prevent the big blow outs that can happen with credit spreads/Iron condors.
1. This is designed for SPY but would also work on SPX or /ES for those with larger accounts. However other tickers may even be better. I am sure IWM, QQQ, DIA would all work. I will use SPY.
2. 1 trade opened each week, usually Friday but since I am off Thursdays that will be my trade day.
3. Most of the time open an IC with short strike deltas around 16. However may leg in when the market is whippy.
4. DTE 21-56 but most often will be 3 weeks to 5 weeks. I plan on starting 21 DTE.
5. Run it as a ladder, each week will add a new rung.
6. 2-5 points between strikes. Need to have a little room there for adjustments but will also bring in more credit but keep the risk reasonable. The service mostly used 3-4 wide on the strikes. I will use 3 at first to not use up too much margin.
7. Keep enough cash available to make adjustments or close early. You will probably need enough cash to either buy back half of your shorts or add half as many long options between the strikes.
8. Delta neutral hedge when needed to create a back ratio. I personally will be using 2:1 but a ratio of 3:1 or even 4:1 may work depending on how early you catch it.
9. Expiring options that look like they really will close OTM will be allowed to expire thereby saving commissions. However, a lot of the time they will be closed early if there is enough profit.
10. Options that are close to being ITM will be rolled to new series.
11. There are probably 3 ways to control risk when the short option goes ITM but I am using a hard rule for this now. As soon as the short strike is violated I will do 1 of 3 things. This based on some TT research that showed violated credit spreads return to their range less than 2-20% of the time. If the strike is violated, you are probably in a trending/directional market at that point. These also depend on how much time to expiration. If there are a few weeks will go directional. If in expiration week will just shut it down.
A: buy back half of the short options creating a 2:1 back ratio. Then if we keep moving, you make some money from
the directional kick.
B: If I don’t have enough cash for that then I will just close the violated spread. In TOS you can probably set a
conditional order that would get you out for a 1.5-2 x the credit.
C: Add some long options between the strikes in same ratio as A, 2:1. This may be cheaper than buying back
the short strikes. Since SPY has 0.5 strikes would go 1.5 strikes from the short on a 3 point spread.
That’s it. We know this works, just have to control the losses and I think that is the key to success with this tactic. Let’s see how it works again with the hard rules for adjusting.
Credit spread tweaks
EOG STO the 21 DTE 97/98 ccs for 0.23. Cb now 14.41 against a 120/120 and 125/126 put #fuzzy
EXPE STO the 21 DTE 117/118 ccs for 0.20 credit. Cb now 9.43 against a 110/110 put #fuzzy.
It rained over the weekend and my family was busy so I watched a bunch of tasty trade re-runs. 2 things I forgot about. They did a section on defined risk and looked at the number of times tested credit spread returned back to the level you placed the spread. It was less than 2:10 times, actually I think as they looked across multiple occurrences and it was much lower around 2%. So gave me an idea for credit spreads and #spycraft which I will start up again next week after some CC are called away.
I will be very mechanical in adjusting credit spreads now. As soon as the short strike is breached, I will delta hedge it to neutral and create a back spread. Odds improve that if it is breached will not return to that level so at that point you have a directional trade and might as well take advantage if it.
What this means is that if the short strike is breached, I will buy back half the # of shorts calls/puts as the original credit spread thereby creating a 2:1 back ratio. Then if we keep moving in that direction you get the boost from the directional kick.
Probably best to set these up 21-45 DTE so you have some room. A weekly probably would not work as well once ratioed because of the gamma effects close to expiration.
Reading posts a lot of…
Reading posts a lot of us are under water on a lot of tickers. Out on a bike ride I had a thought. Obviously selling below the cost basis a snap back rally you then lock in your losses if assigned.
I have been saying it for a while but have yet to do it, sell ATM call credit spreads. Bring in a little income, if the market rockets upward you are long stock, short an equal # of calls, but then have the same number of calls long or any ratio you choose. No cap to the upside.
Personally I am going to do this on my TQQQ trades with the next roll. Roll down right to ATM and then be long net calls for free.
Probably not the best to do these with weeklies, I would go out 30-90 days to give them some room. Then if you want back in the stock, let your long calls exercise.
As for my losing put #fuzzy, duh on my part, I should be selling CCS spreads all the way down. We reverse and I will back ratio them. The problem is I always do it too late. From now on if I sell a delta 20-30 and it reaches delta 30-50, that is the point I will back ratio and hopefully get a directional kick. If nothing else at least reduce the max loss.
Thoughts? Other ideas?
Lots of trading and work,…
Lots of trading and work, not much profit. The #fuzzy trades hold up well but since I am so far out in time and so far ITM on some of these now, not much income or fast theta decay. Had I known we would be in a full bear I would have unhinged them and would be collecting profits now.
#fuzzy
EOG 110/110 puts are now way ITM. Market makers are being greedy. I have an order in to roll the 29 DTE out to 43 for 0.45 credit but no one will take it. If I can’t roll it will reset or shut the entire thing down for about a 6 point loss as it gets closer to expiration. Hoping for at least a little bump in oil prices. cb 14.64
EXPE 125/126 and 120/120 rolled the 15 and 22 DTE out to 36 and 43 DTE for a total of 2.1 in credits. Cb now 9.63.
GILD 70/70 nice bump today. Cb 8.48 and will roll in a few weeks.
MU 35/35 cb 14.80. Getting dragged down further into the black hole by AAPL.
WDC 40/40 cb 19.11 same as MU.
XBI 80/80 cb 13.97
LNG 50/65 cb at 14.54
GILD lot 2 67.5/69 cb 8.9
Most of these are out 15-22 days before further rolling.
#pietrades
TQQQ 50 cc at 57.60 cb. Will either roll to a leap in 2 weeks or hope for rebound. IRA so I can sit on it but would like to be generating some income.
TQQQ lot 2 50 cc 58.10. Same story.
LNG 61 cc expires next week, cb 57.7 and if expires ITM will be first real winning trade in 13 weeks.
LNG lot 2 61 CC cb 58.53 sam as above.
#lizardpies
SQ 55.5/55.5/56.5 straddle expires tomorrow rolled down to strangle 54.5/55.5/56.5 for 0.49 credit. Total credit now 2.04 with cb of 53.46 if assigned and no risk to upside.
I really think the jade lizard will be an excellent tweak to the #pietrades and possibly increase returns another 10% annualized. As I unwind some of these other trades will be putting more of these on.
I also need to be much better at directional trading!!!!
As I have said before, the income will not keep up with the drops, as much as the market is a 50-50 proposition, the more I trade the more I realize being right on directional makes a huge difference to the success of a trade and profits in general.
Happy New Year!
Good riddance to trading in 2018. I survived but given the SVXY melt down in Feb. and the last 3 months did not make any money, in fact flat for the year at the same levels I dropped to in Feb. Some accounts up a little, some down but the total portfolio basically flat.
However, as much as I thought I knew I learned a lot more, thanks to a lot of people on this site.
Some fairly decent changes and adjustmentswill be made to my trading for next year. The biggest changes will be changing my directional bias early, always keeping a portfolio hedge (but not until VIX drops and options are cheaper) and bringing in more income with proven strategies.
You will see a lot more #lizardpies using either straddles or strangles depending on the ticker, #unhingedfuzzies, #spycraft will be resurrected but with a hard rule for adjustments based on deltas/gamma, and a lot more synthetic trades to capture directional moves. This may include #riskreversal or outright #synthetics.
Cheers to a new year, new opportunities, and the collective ideas of the group making us all more successful traders!
Chris
GILD #fuzzy. Rolled the 70/70…
GILD #fuzzy. Rolled the 70/70 18 DTE out to 39 DTE for 0.56 credit this morning at the open. Cb now 8.48.
EOG #fuzzy 110/110 leap puts….
EOG #fuzzy 110/110 leap puts. Rolled the long out to 2021 for additional 3.20. Cb increased to 14.64 but now have 107 weeks to manage it.
#pietrades LNG 61 cc rolled…
LNG 61 cc rolled out 2 weeks for 0.74 credit. Cb 58.53
Lot 2 62 CC rolled out 14 DTE to 61 cc for 0.53. Cb 57.7
Might have a few more later in the day
Question for @fuzzballl as I…
Question for @fuzzballl as I am debating closing some #fuzzy for tax purposes or keep them rolling.
Have a few that are way ITM now. Wish I had ratioed them in Oct. but too late now. Since you seem to be the only one with enough patience to take these to the end here are my questions
1. About how long does it take you to scratch the trade one ITM?
2. Seems like the best way to get any decent premium is to sell 43-45 DTE and reset at 22 DTE. Have you found that as well?
3. Once the new series of LEAP comes out does it make sense to roll the longs to the new leap for $3-4 or hang on to the one you have until the end?
Thanks!
I am debating taking some tax losses and resetting vs. hanging with the ones I have.
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 🙂
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 🙂
Merry Christmas Eve!
Did not think I would trade today but the continued market puke fest took all the time value out of a few of my positions.
MU rolled the 18 DTE 40/40 #fuzzy out to 39 DTE for 0.33 credit. Cb now 14.8. I suspect there is a lot of tax loss selling in the this and WDC and hope they will rebound in the new year.
I have some EXPE trades in the cue but the market makers are being greedy.
Also, even though my equity curve is now down, in my core account I have generated 17% cash returns over the last 12 weeks. As @kathycon I believe said below, equity is lower but cash is higher. Good to have some cash to use but this time I am waiting until I see a shift.
Maybe, just maybe that was the bottom this morning. The VIX spiked to 33.38 and hopefully that will mark the low. I was personally thinking we needed a vix spike 30-50 before a bottom. Of course it could go much higher but the last major dips were done when there was real panic.
Merry Christmas
So much for the Santa…
So much for the Santa Claus rally this year. I hope some of this is tax lot selling and we rebound in the new year.
I will be adjusting more positions next week when we re-open.
Merry Christmas everyone!
Alphashark tool market tide indicator.
After figuring out a rough number of how many want the tool Bryan has given the go ahead.
Just send him an email directly. Bryan Klindworth and his email is bryan@alphashark.com. Tell him you want the tool and the special pricing and are from the Options bistro. They will then give you a special link to purchase at the discount.
Not sure how long he will leave it up.
Can install in a few minutes on TOS and there are also recordings of mentoring sessions.
The only catch is the first person to buy it has to spend $299. Everyone after that gets it for $249.
Happy Trading! You directional guys will probably love this but it only works on time charts, not ticks or range charts. Just something to be aware of.
Merry Christmas, think I am done until next Thurs.
#lizardpies Just converted the SQ…
Just converted the SQ trade below into a jade lizard. STO the 55.5/56.5 ccs for 0.44 credit. No upside risk if we rebound and lower break even now 52.08. Widens out the break even on the downside, no risk to upside.
Lots of adjusting but not…
Lots of adjusting but not making anything, just staying flat. Brutal market, I am officially only 2 k above where I was Feb 2018 after the SVXY losses. Obviously need to change what I am doing, need more directional trading as income investing cannot keep up with 10-20% moves. 2018 is going down as a worse year than 2015. Hope everyone else is doing better than surviving. Even the increased volatility is making it hard to roll.
#pietrades
SQ STO the 56.5 8 DTE put for 1.11. CB 55.38 if assigned but I am most likely going to roll it. Actually it is now down 3+ and will roll it now. Moved to 55.5 15 DTE for 0.22 credit. Break even now 52.52.
LNG 61 cc rolled out to 15 DTE for 0.61 credit. Cb 58.10
TQQQ lot 1 60 cc rolled down to 50 cc 43 DTE for 0.80 credit. Cb 58.10
TQQQ lot 2 60 cc rolled down to 50 cc and 43 DTE for 0.70 credit cb 57.60
LNG lot 2 15 DTE 61 cc cb 59.27
#fuzzy
EXPE 125/126 rolled 43 DTE for 0.55 credit. cb now 12.23
EOG 110/110 rolled out 43 DTE for 0.4 credit. cb 11.44
GILD 67.5/69 rolled out 43 dTE for 0.69 credit cb now 8.90
May plan going forward. The now deep ITM #fuzzy will roll the short options out to 43 dte then reset after every 3 weeks. Hope to keep chipping away and if the delta/gamma becomes too large to roll for credits will either close or roll up/down. As long as I can gain 0.4 every 3 weeks will run them to expiration. Still have 108 weeks on most.
For the #pietrades that are below cost basis will aggressively roll up at any sign of rebound to avoid being run over and locking in a loss.
As cash builds from the rolls may either sit on it or add to weekly #pietrades depending on what the market is doing. However I think getting short here is stupid. Any progress on a trade deal with China and I think we rebound big time. Not to get political, but I think the GOP is starting to see how bad tariffs are (layoffs, increased costs, and now crashing market) and to keep their jobs will pressure to get a deal done.
Trade smart or sitting on the sidelines for a while is also a viable option. Wish I had just kept my hedges on, I would be pulling out huge amounts of cash now. Another expensive lesson learned.
I take it FOMC was…
I take it FOMC was not good. Away from my desk for a few hours and everything green turned red, very Christmasy!
MU #fuzzy Rolled the 40/40…
MU #fuzzy
Rolled the 40/40 down to 35/35 for debit of 2.10 then credit of 0.88 so cost basis now 15.13. Its a dog but weekly premium is good so I thought I would stick with. Have 108 weeks to break even or hopefully make some money on it.
MU and WDC both went from being my best perforning tickers all year to my worst in just 10 weeks.
Not advertising here and I…
Not advertising here and I am not getting anything out of this but some local trader friends wanted the Alphashark market tide indicator. I spoke with Bryan who developed it and negotiated a deal. First copy $299 but any additional copies for $249 and no limit. It retails for $999 on their website. I have been using it for 2 months now and would gladly pay retail now that I know how well it works.
Here is a screen shot with just the indicator and a market profile.
He did not want me just randomly posting the link so if you want it send me an email or let me know here and I will send you the special purchase link for the discount.
Cheers, Chris
At the lows, do we…
At the lows, do we finally get a Santa rally or drive further off the cliff.
I would not mind the seasonal Santa rally but so far has not looked like it is going to happen.
Trade smart and don’t drink too much eggnog!
Rolling a bunch this week
#fuzzy
EXPE 125/126 7 DTE rolled out 21 for 0.40 credit. Cb 12.78
EOG 110/110 7 DTE rolled our 28 DTE for 0.55 credit. Cb 11.84
MU 40/40 7 DTE to 21 DTE for 0.40 credit. Cb 13.91
WDC 40/42.5 7 DTE to 28 DTE for 0.51 credit. Cb 19.58.
GILD 67.5/69 1 DTE to 21 DTE for 0.76. Cb 9.59
Still have 109 weeks to manage these and some have already been reduced 25-50% from original cost. For pure ROI looks like #fuzzy may win especially when volatility kicks up.
#pietrades
LNG 62 cc 1 DTE rolled out 7 DTE for 0.74 credit. Cb 58.84
All told $1860 of credits for the week. Another week or 2 will have enough cash to start the #lizardpies test using 1-2 contracts. After 8 weeks of being flat finally bringing in cash again to use for new trades.
I plan to try to take a few of the #fuzzy all the way to expiration just to see what kind of actual/real world returns you can get over a year. Currently looks around 100% annualized. With the exception of WDC. may end up closing that as soon as I can break even especially if it keeps dropping.
Have a great weekend 🙂
#fuzzy GILD 70/70 3 DTE…
GILD 70/70 3 DTE rolled out to 17 DTE for 0.53 credit. CB now 9.78 and 109 more weeks to go. This one already up 1.01 per contract if I closed it now.
WDC #doubledip Rolled the 11…
WDC #doubledip #fuzzy
Rolled the 11 DTE 40/47 down to 11 DTE 42.5 for 1.04 credit. cb now 20.09. 109 weeks to manage but this one has been such a dog lately I will probably scratch it once I can break even.
Why I sell options-last 2…
Why I sell options-last 2 days whipsaws, dow down 800 points yesterday, recovered. Today down another 485. All of my tickers are down but because of theta decay my core account is up. Wrong on direction but still making money.
I salute those of you that successfully trade directionally but these are the times that make me realize that being the house always wins in the long run!
However, some stability would be nice…….have a great weekend.
Vix finally moving up quickly,…
Vix finally moving up quickly, possible bottom, there is a lot of volume here over the last 30 days on volume profile. Who knows but if it breaks this level probably a lot more downside.
Going for bike, should know when I get back.
Rolls
Trying to get back to selling weeklies, better returns in real time confirmed by my account balances. Taking a credit of 0.4 every week works out to $2080 profits for 52 weeks vs. 1.2 x 12 months only works out to $1440 or 37% better return. So anyway, even with the gamma risk the decay is much faster on weeklies and the #pietrades concept works so now I am trying to apply it to all other trades, #fuzzy, #coveredcalls etc. to increase income. Last 8-12 weeks had gone out 21-45 DTE on expirations to help deal with the volatility. Trying to pull everything back to weekly now. I know TT shows 45 DTE works best but not according to my account balances.
#fuzzy
MU 40/40 8 DTE rolled out to 15 DTE for 0.53 credit. Cb now 14.16
WDC 40/47 8 DTE rolled out to 15 DTE for 0.27 credit. Cb 21.13
GILD 67.5/69 1 DTE rolled out to 8 DTE for 0.61 credit. Cb 10.35. I really wanted to let some more time decay but doubt I will have time to trade tomorrow. Starting to see flu so the office is really busy. Get your flu shots if you have not had them yet.
Added 1 more at lunch time, EOG 110/110 8 DTE rolled out 15 DTE for 0.30. Cb 12.39
Still have 110 weeks to manage all these. The #fuzzy trades handle the volatility better than anything else I have on at the moment.
#pietrades
LNG 1 DTE rolled out to 8 DTE at 62 cc for 0.45 credit. Cb 59.58
Lots of expirations next week and week after. Should free ups some cash to try a live #lizardpies and maybe @elitethink short iron fly tactic, small lots on both.
Hope everyone is having a good week 🙂
@elitethink Spy example with a…
Spy example with a 30 point spread. Based on math, the straddle is selling for 7.6 next Wed or 1 week and 4 x that would be 30 points. So here is an example on a 30 point wide iron fly.
Second graph shows an adjustment if it dropped to 262, now of course the prices would change but shows a flattening of the risk curve.
I know this is not what you are doing but just trying to get the basic math down.
So if the first graph is correct, at what point do you adjust?
Interesting idea
Stop at 9.3 debit, then add next spread in same expiration or going out to next expiration? Obviously at this point one side would be winning.
This is kind of my idea with the #lizardpies, sell the straddle to make as much decay as possible, hedge the upside, cash secured on put side.
Yeah, post the live trades, I am interested in how it works live in the market 🙂
Maybe the leveraged products are…
Maybe the leveraged products are not so good for options. We definitely saw that with SVXY. TT has done some new research.
Obviously the advantage is a lot of them are priced lower than SPY so can use in smaller accounts.
https://www.tastytrade.com/tt/shows/market-measures/episodes/trading-options-on-leveraged-etfs-11-26-2018
Also, finally had time to read the optionsellers.com debacle. No one will mange your own money better than you. I think everyone here knows that. I read their book, actually good but maybe naked strangles on futures not the best idea.
Figured with a quiet trading day would pass this along.
Bipolar market again, either buy…
Bipolar market again, either buy everything or sell everything. Anyone have a sign for that? The only thing saving my accounts is large positive theta decay, $300+ daily no matter which way the market moves.
Platform upgrade
Tradestation released version 10. For anyone using it I suggest you update. Faster, more stable, looks like easier trading and all your tools will automatically transfer, just make sure you click yes for the import. Looks like they are trying to catch up with TOS.
Cheers!
Rolls and adjustments
#pietrades
TQQQ 63 cc rolled out to Jan 19 60 for 0.70 credit. CB now 58.4
TQQQ lot 2 65 cc rolled out and down to Jan 19 60 for 0.70 credit. Cb now 58.75
Just sit on these until rebound. If not will convert to #fuzzy later.
LNG 65 CC rolled down 8 DTE to 62 for 0.96 credit. CB 60.03 so will let assign next week. My plan with this account is to then start a live #lizardpies.
LNG lot 2 expires in 3 weeks at the 61 CC for cb 59.27. Same as above but will change ticker.
My #pietrades for the next few weeks will be LNG, GILD, EXPE, EOG, XBI, SMH. A few others I am watching but these will be the core trades for a while. Want to see chips and a few other names stabilize before adding.
#fuzzy
LNG 50/65 rolled out 43 DTE for 1.03 credit. Cb now 15.31 and 110 weeks left.
I have not taken a LEAP all the way to expiration in several years but I may do that with some of these smaller accounts to see what kind of annualized returns I can achieve. Hopefully 50-100% or more.
Have a ton of contracts expiring in 15 and 21 DTE so sitting on hands until then. At that point will add a few more live #lizardpies as I roll the #fuzzy and free up some cash.
4 things I noticed with the latest correction. If you own the stock can sit on it long term but the losses are much larger on paper than with spreads and takes a lot longer to get back to even.
The spreads help navigate the corrections and are easier to adjust, but everyone here probably already knew that.
Using longer options with the #pietrades 21-43 DTE prevents a lot of assignments and easier to roll. Also helps handle the volatility easier.
Once VIX settles down (under 15) will always leave on an SPX or /ES hedge lottery ticket to cover about 10% correction for the account. Probably finance it by selling a LEAP on something I want to own long term.
Finally a slight bump in my equity curve after being down/flat for the last 8 weeks 🙂
Since we are on experiment…
Since we are on experiment discussion below again, here is one I have been paper trading. A twist on #pietrades. If we need a new term we could call them #lizardpies.
So obviously with the market rout all my #pietrades went ITM and to prevent a meltdown in margin I converted them all to #fuzzy. Which is great, has controlled the volatility and still have 111 weeks to manage them. But as @fuzzballl points out below, they are expensive. Cheaper than stock but my EXPE puts are now trading at 22.40 and 19.50. Not chump change.
The #pietrade idea is sound for income generation and even some capital gains long term as long as you sell the call ATM or OTM once assigned the stock. You also are typically only selling 1 side and as Karen the supertrader (now scam artist) figured out, selling the other side is what really improves long term returns and consistency. She may have been using some creative accounting but the idea is sound and has been proven by tasty trade.
So here is the tweak I have been playing with. When you set up the trade, start it as a #jadelizard but set it up ATM. For example with XBI currently at 78.02 I would sell the 10 DTE 78 puts naked (cash secure) and then sell the 78/79 call credit spread. Total credit 2.55. No upside risk, downside break even is 75.55 which is lower than where I probably would have just sold the put.
3 possible outcomes
a: below 78 assigned shares on the put at 78 but cost basis 75.55. Can sell a next week call or call credit spread if you think rebound, then uncapped upside
b: Between the strikes max profit and you may be assigned on the call but can exercise your long call if needed.
c: above 79 everything cancels out and you keep the credit minus $1.
Here’s a graph on a 10 lot.
I have been trading it on paper and it would have had better loss control on the #pietrades than straight put sales the last 2 months.
Thoughts, holes in the strategy, other ideas to tweak it or make it better? If you wanted to be more conservative could sell strangles OTM instead or straddles ATM on the short sides but then less credit. Since my premise is income, I am trying to bring in as much credit as possible on the front end.
Only 1 trade today
#fuzzy
EXPE rolled the 125/125 put spread down to 120 for net debit of 0.95 bringing cost basis up to 13.18. Fair trade off as I can collect more credit on rolls now ans still have 111 weeks to manage. It was too far ITM to collect any decent credits on rolls.
Happy Thanksgiving everyone!
Going to burn off some of these calories now.
#fuzzy GILD rolled the 3…
GILD rolled the 3 DTE 69 call out 16 DTE for 0.96 credit. Cb now 10.96 on this batch and still have 111-112 weeks to manage.
Have a great Thanksgiving!
#fuzzy GILD rolled 4 DTE…
GILD rolled 4 DTE 70/70 out to 25 DTE for 1.02 credit.
Cost basis now 10.31 and still have 112 weeks to manage.
Starting to agree with @fuzzballl, the extra time on these makes it a lot easier to ride out market volatility.
However, I am trying to trade them #pietrades style to keep cash coming in. Seems to work, I doubled my cash balance in the core account with just 2 trades this morning (was not much to start with, only $1100). But now I have enough to add some more contracts somewhere at better prices 🙂
So much for the Santa Claus/holiday rally?!
Ouch on the /NQ.
Rolled EXPE 12 DTE 125 put out to 29 DTE for 0.65 credit. Cb now 12.33 on the 125/125/126 #fuzzy. I may actually roll it down later and take out some built up credit.
EXPE #fuzzy 125/125 7 DTE…
EXPE #fuzzy 125/125 7 DTE put rolled out to 28 DTE for 1.00 credit. Cost basis now 12.88.
Since this is a put spread if it keeps dropping I will roll it down to 120 or 115 soon and take out some credit.
As I said earlier in the weeks, spreads are easiest to manage at the moment, even easier than stock because you can adjust up and down.
Bonus day off and the weather is better, going to clear a trail then mt bike it.
Have a great weekend, I am done for the week.
GILD
Added batch 2 in a different account that had some cash left.
#fuzzy 70 2021/70 8 DTE for 11.33. 113 weeks to hopefully sell against.
Market still whippy. Picked up kids and /NQ down 50+ from the highs.
/NQ chop fest.
Tried to take a few more directional trades, entered at nice signals on my tools, absolute reversals on every signal even going to a 5 minute chart and signals. Swinging from -40 to + 52 in a matter of minutes. After loosing $900 for the day am done with the directional trades, at least on /NQ.
/ES not a whippy but still staying away from picking a direction until it is obvious on a daily chart again.
All I want for Christmas…
All I want for Christmas is a Santa Claus rally 🙂
Adjustments, just doing my best to bring in income to offset the continued chaos.
#supercharger
TQQQ 40/45 BTO for 4.50 sold for 3.75. Trying to keep this account from being wiped out so taking a small loss before it became worse. Going long term with what’s left on a GILD #fuzzy.
#fuzzy
GILD 2021 67.5/69 next week for 11.92. Have 113 weeks to manage.
EXPE 125/125/126 rolled the 1 DTE 126 out to 15 DTE for 1.00. CB now 13.88 and as above 113 weeks left.
XBI 2020 80/85 15 DTE rolled down to 80 at 43 DTE for 1.91 credit CB now 14.63. 61 weeks left to manage.
#pietrades
LNG 63 cc tomorrow rolled out 43 DTE and down to 61 for 1.97 credit. Cb now 59.27.
Bizarrely MU is up, go figure?!
As @kathycon said below, market is defying all patterns and seasonality this year, not quite and exact quote but close. Does the VIX need to spike to 50 before the selling is done? Who knows, trade smart, preserve capital, there will be big opportunities soon enough.
If the whippy settles down later my try some directional trades before the day is over.
Good luck, stay safe!
And the winner is:
#fuzzies during the market volatility. Makes sense, the spread offsets both sides and the income from selling options helps cushion the drop.
Trying to get back into #pietrades but market not really cooperating at the moment.
I am not the directional…
I am not the directional guy but while eating lunch /NQ just pushed to new 20 day lows on a 5 minute chart and bounced fairly quickly. Not saying this is a bottom but on market profile there is a lot less volume here so any reversal is likely to snap back to 6865 fairly quickly.
What is @fibwizard showing?
Next big levels above that are 6977 and 7104. Big volume at the 6977 level.
Friday clean up
Had some things expiring and others just out of time value so #rolling, closing, adjusting.
TQQQ CC 63 rolled out to 42 DTE and down to 61 for 1.55 credit. CB now 59.10.
TQQQ lot 2 CC 63 same as above. Cb now 59.45.
QQQ 7 DTE 150/155 #supercharger sold to close for 4.92. Bought for 4.52 so about $132 profit on a 3 lot.
New TQQQ #supercharger 21 DTE 40/45 bought for 4.50.
Now just sitting on my hands until next week. Wish I had time to trade /NQ this morning, that would have been profitable.
Have a great weekend 🙂
EXPE rolled the 126 puts…
EXPE rolled the 126 puts that expire today out 15 days for 1.85. Cb now 13.03 and have brought in $4750 in premium in 4 weeks on a 10 lot #fuzzy and still have 805 days left.
This is a good one for #pietrades but if they go wring converting to a #fuzzy also seems to work.
Hope everyone else has a good expiration and weekend 🙂
WDC adjust at the close
Rolled the 22 DTE 47 call out to 43 DTE for 0.74 credit. Cost basis now 21.4.
EOG reset
This one got away from me as I chased the short puts up as it made it almost to 130. Now back down to 104 so I had a mess and was long the 115 2020 outs and short the 36 DTE 120 puts. Rolled the entire thing down and out so now have the 110 long 2020 puts and the 43 DTE 110 puts. All said and done the shorts cost me 7.85, I had a credit of 2.82 for the long roll down, adding that to my cost basis of 7.66 I now have a total cost basis of 12.69 but no margin requirement.
Will keep selling and may eventually convert it to 2021 if it stabilizes.
Now I am done for a while, trade smart!
Options Bistro 