MU rolled the 40/40 22 DTE out to 43 DTE for 0.66 credit. cb now 14.69
WDC 40/46.5 8 DTE out to 22 DTE and up to 47 for 0.38 credit. cb now 22.14
Will try to roll these back up and stay ahead of them going deep ITM. If I can’t will ratio.
Now going for bike, hopefully another 1k of decay will happen in EXPE and can roll them when I get back.
#pietrade tweak I am considering.
On the initial put sale, I may pair jade lizard with them. Bring in a little extra income, if it does not hit the short strike keep the additional income.
Then if assigned on the put, instead of selling straight CC may sell a call credit spread. Then if called out you may also get a runner on the long calls. Or if nothing else will give you the ability to ratio it if moving around a lot.
As I experiment with this will post results. In looking at more recent trades it certainly would have helped.
Currently #pietrades yield about 30-40 percent annualized on cash accounts, 40-50% on margin. Trying to bump that up a little and at the same time reduce risk.
Yesterday rolled EOG 115/120 #fuzzy out to 36 DTE for 0.51 credit. Cb now 7.66
Today XBI #fuzzy 80/90 rolled down to 85 and out to 29 DTE for 0.49 credit. Cb 16.54 now
#pietrades LNG lot 2 CC 66 rolled down to 63 and 15 DTE for 1.15 credit. Cb now 61.24. Hoping it will assign so I can restart #pietrades on this account.
Have some expiring tomorrow but with the volatility they are holding on to their premium. EXPE 125/126 short puts on a #fuzzy are sitting ATM and still traing for 0.90 and 1.90. With 10 contracts want to capture a lot more of that decay before I roll.
The hedges worked well, the uptick certainly helps but finally starting to take some profits out of the 12k of premium I had sold over the last 3-4 weeks. Another week or 2 and all that premium should find it’s way to my accounts as long as we don’t implode again.
Once VIX settles down will put the SPX hedges back on. New personal rule, anytime VIX is 12.5 or under will keep SPX hedge on. Maybe 1-2 times a year have a winning lottery ticket. This year would have paid out twice, Feb and now!
Looking at the futures there may be a short squeeze rally developing. Won’t really know until 2 pm when the margin requirements kick in but if it stays up until then I would expect buying into the close instead of selling.
More like a falling hindenberg than a falling knife. Actually at this level not a bad dividend. I am working on rolling the #fuzzy down but don’t have time to update at the moment.
Hope everyone has a good weekend.
Fresh sell signal on 15 minute into close. Shorted at 7020 out at 6960 so profitable for the day.
Seems like the big moves occur early and late in the the day as people move stuff around to avoid margin.
#rolling and recovery
Scalped a few more trades on /NQ and gave back my gains. But learned that 15 min and 30 minute chart is probably ideal for scalping. 1 and 5 minute too much chop. I will be adding some more directional trades and using my tools.
#fuzzy
XBI 80/97 rolled to 80/90 for 0.49 credit. Cb 17.84
LNG 50/66.5 rolled to 22 DTE 65 for 0.49 credit. Cb 17.84
XBI lot 1,2,3 closed for losses totaling 620. With only until Jan 2019 and hardly any cash in this account did not think it was worth trying to recover and losing more.
#pietrades
LNG Lot 1 66 cc rolled down to 65 and 43 DTE for 0.83 credit. Cb 60.99
LNG lot 2 66 cc rolled the same for 0.9 credit. cb 61.00
#supercharger all I had left for in this tiny IRA.
QQQ 22 DTE 150/155 for 4.53. Will have to manage if we drop more.
Channeling @fibwizard
With the volatility trying a few futures scalps. Full disclosure, I have done this before, just my job does not allow me to do it on work days. Off today, daughter home sick so figured I can make some money back. Entered at the green arrow but set stop to tight and triggered out 3 bars later while I was making breakfast for a $205 loss. But re-entered close to the lows as the signal is still valid. Will hold until I get an exit signal on the 15 minute chart.
Wish I had kept my SPX hedges on. A $3 put that I had on at 2550 is now trading for $21.40-22.
Most months you never need it. Last few weeks it is almost a mega millions or power ball ticket.
Once we settle down I will always keep one of these on. Either long puts, ratio, or risk twist for times like this. Then you have a pile of cash you can deploy when the market tanks.
BTC the the 52 DTE 55/86 strangle for 0.28. Sold for 0.3 so a $100 profit after a week and at least I can say I made money on something these last few weeks.
Also freed up cash and margin for a hopeful bottom
Officially went flat on the year with todays drop on paper. Gave back all the profits since Feb. Obviously income investing cannot keep up with extended moves.
I am comfortable with my directional trading now but do not have the time to watch the markets all day.
Have to come up with a hybrid trading model. Core based on income investing but really need to take some directional plays to boost returns and keep up with the extended directional moves. As I generate cash with rolls will figure out how to do that better.
Hope everyone else is preserving some gains.
If I can generate enough cash with some rolls this week, I might start nibbling on SPY IC or at least one sided credit spreads. Would be a shame not to at least collect a few $ with the premiums being higher than they have been in a long time.
What are you guys doing?! I go mt bike for 2 hours and the market is melting down again.
#rolling and adjusting. Everything hedged so not too bad on paper, still waiting for a ton of short options to decay but the volatility is keeping the prices up. Good for when I can roll.
/CL I had a stop loss on the strangle and it must have triggered early in the morning when oil was down 2. Lost $750 as it closed at 0.87. Re-entered 57 DTE strangle but went wider, delta 4s and sold the 55/86 strangle at 0.28.
LNG lot 1 66 cc rolled out 22 DTE for 1.25. Cb now 61.28
LNG lot 2 66 CC rolled out 22 DTE for 1.24 credit. Cb 62.39
#fuzzy
XBI 87/95 2019 LEAP rolled out to 43 DTE for 0.28 credit. Cb now 4.05.
Sitting on my hands for another 1-3 weeks, then big expirations which should free up a lot of cash. Hopefully things stay on sale:)
Hope everyone is doing well and making some $ on the volatility.
First time looking at the market today. That is what a short covering rally should look like 🙂
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 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 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 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 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 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.
Closed out the 30 DTE 64/88 strangle for 0.41. $900 profit in under 10 days. Left the 65 DTE open.
Futures down big after hours so just freeing up some cash for hopefully a bottom soon.
No predictions here but I don’t think we bounce until the VIX is in the 20s.
Only trade that is working for me at the moment is /CL. MU, WDC, EXPE, and most of the chips all suck. Good thing they are #fuzzies and still have 1-2 years to break even.
I am now flat on profits for the year in my core account but still have 12k + of decay over the next 35 days. Unfortunately they theta decay is not keeping pace with the dropping market.
Rolled the 67 DTE 63.5 put down to 58 for 0.40 debit.
I know we usually roll the untested side, but I am widening the strangle out so I can stay in it longer.
/CL added another strangle 71 DTE 63.5/91 for 0.70 credit. Goal is to close the other one in another week, already up $900 then leave the longer one on a few weeks. The decay rates on these are about $100 per day for 5 contracts.
XBI #fuzzy lot 1 80/97 rolled out 36 DTE for 1.23 credit. Cb 18.33
LNG #fuzzy 50/66.5 rolled out 36 DTE for 1.33 credit. Cb 17.24
XBI lot 2,3, and 4 at 95/98 adjusted to 95/97, 87/95 and 95/95 rolled out to 26 DTE for 1.15 and 1.35 credits. Cost basis now 3.62, 4.33, and 0.85. Almost have a freebie, one more roll should do it but then have until Jan 2019 to keep bringing in cash.
Equity curve still flat with all this adjusting but on a positive note I have A LOT of theta decay over the next 32 days and it is all OTM at the moment so that should move the needle on the equity curve finally. Just need to sit on my hands for a week or 2 and let theta decay do its magic. Some expire next week, some week after and it all clears in 32-36 DTE.
MU #fuzzy
Rolled 30 DTE 50 call out to 44 DTE for 0.43 credit. Cb now 8.67. Briefly had a break even, need a few more rolls to put it solidly in the profit column.
/CL STO the 43 DTE 88 call for 0.24 for the 64/88 strangle.
Looks like it may have finally found a top.
Already closing the 84.5 44 DTE call on the strangles. Only $200 loss. Leaving the put open until oil either forms a new range or reverses. Re-entry is only a commission away.
More lawn mowing musings from the weekend. After reviewing oil trades from the last year realized all the losses were because 1 side was always run over on the strangles or IC. If I had just paid attention to direction almost all of them would have been profitable. Oil is still moving up but much more slowly and my indicators are pointing to slowing momentum and seasonality effects should also kick in. Not giving up on oil, I see the potential profits but will be much more aggressive managing these either by converting to spreads quickly or rolling the losing side out quickly.
With that in mind, sold the 45 DTE 64 put last night at 0.29. The pause this morning sold the other side 84.5 call 44 DTE for .022 for the 64/84.5 strangles.
Small size until I see how my adjusting works.
Rolled EOG 115 put 35 DTE out to 42 DTE and 120 for 0.96 credit. Cost basis now 8.17 and my long 115 puts are worth more than that so technically this has broken even after 6 weeks. Rather than close it will keep it rolling. Can’t say I have ever taken a #fuzzy to full expiration but may be fun just to see what happens. Everything now should be income and can probably scratch the trade in another 12 weeks.
Could probably do the same with MU but will wait 1 more week the short still worth 0.68.
Margin reduction trade, did not have to do this but was using up a ton of buying power.
EXPE BTO the Jan 2021 125 puts at 17.80. Converting a #pietrade to a #fuzzy just for margin at 17.80. Subtracting the 2.90 and 2.95 from sales the last 2 weeks cost basis 14.88.
With 120 weeks left to trade only need 0.124 per week for zero cost basis. I will still manage these as 43-22 DTE PIE ladders, just hedged.
Also rolled Lot 2 LNG 66 cc out 14 DTE for 0.63 credit. Cost basis 63.6 now.
That’s all for me until next Thurs. unless someone points out a really good trade before then.
#pietrades
EXPE adding second rung to PIE ladder.
STO the 43 DTE 125 put at 2.90 and still short the 126 from last week at 2.95. Goal with these is to have 3 weeks rolling and as they approach 22 DTE roll them back to 43 DTE. Instead of a weekly #pietrades more like a conveyor belt running from 43 down to 22 DTE. Better premoiums by going out farther, less chance of going ITM, less adjusting, and less gamma risk. Experimenting with a few names based on the Tasty trade research of 45-22 DTE as the best decay rates for OTM options. Currently selling the delta 30 option if trending up on 4 hour chart and more like a delta 20 if pulling back.
TQQQ lot 1 65 CC rolled out 22 DTE for 1.15 credit. Cost basis now 62.05.
LNG lot 1 66 CC rolled out 15 DTE for 0.44 credit. Cb now 64.23
TQQQ lot 2 65.5 cc rolled out 22 DTE for 0.75 credit. Cb now 62.40
#fuzzy
LNG 50/66.5 LEAP rolled out 15 DTE for 0.68 credit. Cb now 18.57
LNG lot 2 cc may try to roll tomorrow or just let call out depending on what market does.
Have a good week, have 2 days off, going outside to bike 60 miles.
Whiz must need more subscribers to pay for a new boat, just received FXI BCS 44/43.5 Oct 12 for 0.27. Not taking it but know some of you follow him.
EOG rolled 115 put 18 DTE out to 39 DTE for 0.83 credit. Cost basis now 9.13 and still have 68 weeks to manage. I may unhinge this one and just be short the puts if it keeps moving up.
MU trade from Friday did not have time to post. Rolled 50 call from 8 DTE out to 39 for 0.60 credit. Cost basis now 9.1 and same as above 68 weeks left to sell options.
Too busy at work to check in this week, some interesting trades but TRLY I will watch with amusement from the sidelines:)
After rolling and recovering earnings trades for weeks equity curve finally moving up again. The theta decay finally caught up the the drops in AMAT, WDC, MU and the rebound does not hurt but now ITM on some of the shorts so will have to move them back the other way but have a few weeks.
Rolls/new trades/ #pietrades and position update.
#fuzzy coversions
MU 55/50 2020 LEAP recovering. Cb 9.70. and will roll short call for 15 DTE soon.
WDC 60/58 2020 LEAP now ITM. 36 DTE on the short so will roll up when the time value erodes. CB 15.41
EOG 115 2020 LEAP Cb 9.96. 22 DTE on short side, waiting for time value to drop.
XBI Lot 1 80/97 2020 LEAP cb 19.56 and short calls 22 DTE.
LNG 50/66.5 2020 LEAP cb 19.25 22 DTE on shorts
XBI lot 2 95/98 2019 LEAP next week rolled to 22 DTE for 0.67 credit. Cost basis 4.82. Also have 87/95 at 5.68 and 95/95 at 2.2. Trying to take these to zero cost basis then roll cash into new trades.
TQQQ lot 1 65 CC cb 63.20, will let assign next week and reset
TQQQ lot 2 65.5 cc cb 63.15 and will let assign next week
LNG lot 1 cc 66 rolled 1 week for 0.49 credit. Cb 64.23
LNG lot 2 66 cc rolled a week for 0.40 credit. Cb 64.32
1 new #pietrade and may become a ladder.
EXPE 43 DTE 126 put sold for 2.95. Cb 123.05 if assigned.
Hope everyone else is having a good week and anyone in NC hope things are drying out.
EOG 115 put #fuzzy rolled out to 28 DTE for 1.24 credit. CB now 9.96 and still have 69-70 weeks to go so only need 0.14 per week to zero cost basis.
Bonus day off, not getting hammered by the storm so time to trade then go bike or kite, might be too windy today 🙂
Still waiting on theta decay, next week a big expiration, this one mostly rolling and a few new trades.
#pietrades
TQQQ lot 1 rolled 64 cc rolled out 2 weeks for 0.8 credit. Cost basis now 63.20
TQQQ lot 2 rolled 65.5 cc out 2 weeks for 1.3 credit. Cb now 63.15
LNG lot 1 66.5cc rolled out a week to 66 for 0.73 credit. Cb 64.67
LNG lot 2 66.5 cc rolled out a week to 66 for 0.93 credit. Cb 64.72
#fuzzy new and adjustments/rolls
New XBI 80/97 2020 Leap and 14 DTE on the 97 for cost of 19.56
LNG 50/66.5 2020 LEAP and 14 DTE on the 66.5 for 19.25
Rolls
XBI 87/95 and 95/95 2019 LEAPs rolled out to 21 DTE for 0.75 credits. Cost basis now 5.68 on the 87 and 2.2 on the 95. Getting close to a free trade on these.
Hope everyone in the path of the storm is safe and dry!
I now have about 4-6 weeks on the #fuzzy in the small accounts and have to say anything below 10k this is the way to go, even better than #pietrades. Over that you can do about the same with #fuzzy or #pietrades.
Going forward I will still be experimenting with the 45 DTE open 21 DTE close pie ladders (new hashtag maybe if it works) and will report as they roll/unwind. The TT segment that @thomberg1201 posted the other day added more evidence that may be the best way to income trade.
Hope everyone has a good weekend 🙂
Already rebounding so already adjusting to stay ahead.
Rolled 22 DTE 57 call out to 43 DTE and up to 58 call for 0.53 credit. Cost basis now 15.41 and still have 69 weeks to manage.
I am finding it easier to move up/down/out before it goes too far ITM. Once it does the deltas offset more. At that point probably better to either a) move the entire spread or b) ratio it to prevent so you have no risk to the upside.
Rolled 10 DTE #fuzzy to 23 DTE for 0.23 credit. Cost basis now 9.70.
At least WDC rebounding a little.
Weekly vs monthly options or #pietrades vs #optionladder
Not trying to sound greedy but after I converted a lot of #pietrades to #fuzzies and #optionladder, the decay is A LOT slower. Like watching paint dry but there are some advantages and disadvantages. Had a lot of time to think about trading this weekend with tropical storm and hurricane on the way.
Advantages:
higher premiums up front
less frequent adjusting
lower gamma risk, it can move around more before it hurts the overall position.
less trading=less commissions and fewer trades to monitor
easier to adjust
less intensive trading
Disadvatages:
slower premium decay, much slower my theta is half of what it usually is
less overall premium, you get more up front but 4 weeks of ATM options is a lot more premium than 1 option sale
fewer positions
in the case of diagonals or multi strike calendars, harder to adjust with monthlies. Weeklies let you simply roll up/down/out
less compounding effect, my back of the note pad answer is about 15-20% less annualized returns compared to weeklies
So which one wins? Depends on your goals. Personally I am trying to grow accounts so I will be sticking with mostly weekly and #pietrades. The compounding effects more than offset the additional work.
If you already have everything you need, then #optionladder would probably make more sense.
Some days/months trading is easy, other not so much. These last 6 weeks have been hard for me after earnings went bad and not a lot of time to trade. If it was easy everyone would do it and be good at it.
Thanks again for the ideas. I finally close a lot of these trades in 11 days and can re-deploy capital.
MU double dip. The calls I rolled this morning dropped to 0.17 so rolled again for another 0.59. Now 15 DTE on the short 50 calls and long the Jan 2020 55 leaps. All told brought in 1.01 credit today to offset the drop.
#pietrades and making adjustments.
I have some garbage in my accounts right now and just as I start to break even, it moves again. MU, WDC started as #pietrades, converted to #fuzzies. MU was showing a profit yesterday but 5 points down today on MU and 2 on WDC now have created more work. So anyway, here is what I have and will gradually be moving to ETFs. Only problem is some of my accounts are not big enough to handle the good ETFs unless I #fuzzy them which is probably what I should be doing anyway. On a positive note I have made back 25-30% of the SVXY losses in 6 months. Probably another year to make it all back. That was a harder lesson than the /ES in Aug. of 2015 but at least I had a bigger capital base so did not totally destroy the accounts. Will be interesting to see what happens with the premiums when SVXY reverse splits. I will not trade it unhedged!!
Adjustments
MU 55/50 LEAP call rolled out to 8 DTE for 0.42 credit. CB now 10.52
WDC rolled the 15 DTE 60/65 LEAP down to same date but 60 short call for 1.01 credit. Cb now 16.77
EOG 115 LEAP call 15 DTE, no adjustment. Cb 11.20
New trades
LABU STO the 15 DTE 90 put for 1.2. You could do better now.
TQQQ batch 1 cc 65 at 8 DTE for 64.00
TQQQ batch 2 65.5 cc 8 DTE at 64.45
LNG batch 1 66.5 cc 8 DTE at 65.40
LNG batch 2 66.5 cc 8 DTE at 65.65
Added to XBI #fuzzy and now have all Jan 2019 LEAPS and 22 DTE short calls
95/98 leaps at 5.49 this is the new one
87/95 leaps at 6.43
95/95 leaps at 2.95
At least my theta decay is huge.
Need to be better about direction and timing, wil be using my tools more now instead of just placing weekly #pietrades no matter the ticker is doing.
Even with the garbage still made $582 last week but generally stagnant after the last earnings round.
It seems that a lot of my #pietrades have been converted to #fuzzy lately. Maybe I can get to 10 names, 10 contracts each making $1 or more a week, that would be a lot of cash coming in which would offset some of these dogs 🙂
2 down days in a row. Isn’t that some kind of record?
I will still like more of a flush, have a ton of cash and still want better prices. Trying to be better about timing and direction 🙂
Only 1 trade today. Rolled XBI # fuzzy 87/95 and 95/95 out 2 weeks 22 DTE for 0.37 credit. Cb now 6.43 and 2.95.
Expirations tomorrow
TQQQ lot 1 65.5 cc will let call out at cb of 62.78
TQQQ lot 2 66 cc at 65.02 cb
TQQQ lot 3 65.5 cc at 62.98 cb
TQQQ lot 4 65 cc at 63.90 cb
Will reload on Tuesday.
Hopefully we get more than a 10 point /ES pull back, everything is way extended and do not want to chase trades up. Waiting for a good pull back in LABU. Next pull back I will load a synthetic long, missing a lot of upside by just selling puts.
Have a good long weekend!
I should go long the market here so we get a pull back 🙂
Or short the market and it will keep going up
BTC LABU 85 put this week for 0.15. Sold for 1.9 last Thurs.
Rolled MU this week 50 call leap out a week for 0.32 credit. Cb now 10.94.
On vacation this week but home so still doing some trading.
Let’s get the crap out of the way first. Sorry to anyone who followed AMAT. Loss on the last earnings 12 weeks ago. Almost worked it back to even but they beat last week but still punished so break even or near break even is now a loss again. I mostly had these in small accounts so am closing so I can use the money on something more effective. BTC all the 47 call options for pennies, 0.03. Sold the stock at 43.06 and 43.09. Total losses (not per contract) of $588 on lot 1 and $558 on lot 2. Not bad considering it was down over $2000 initially. Rolling helps but the reason I am closing it is this: as it dropped below $50 the premiums dried up. ATM 1 week out is only 0.4-0.5. Not enough for #pietrades. Second reason is after 14 weeks of not being able to break even, time to move on. Like GM this is off the #pietrade list for a while. If you can’t bring in more than 0.5-1% per week, not worth #pietrade.
STC the SPX 2550 calendar hedge for 0.55. So a 1 month hedge only cost 0.65. I will continue playing with these but doubt I will always have a hedge. Maybe easier to just short some /ES futures when needed.
Rest are updates, rolls, new trades.
#fuzzies
MU LEAP 55/50 8 DTE cb at 11.26. At least MU found a base.
WDC LEAP 60/ 65 29 DTE cb at 17.78. Looks like finding new range in the 60-70 area.
EOG LEAP 115/115 29 DTE cb at 11.2.
XBI LEAP 87/95 and 95/95 rolled out to 22 DTE for 0.72 credit. cb now 6.8 and 3.32. Should be free trades soon.
#pietrades
LABU 8 DTE 85 put for 1.9, cb 83.10 if assigned. Good support at 85.
TQQQ lot 1 65 cc rolled to next week 65.5 cc for 0.20 credit. Cb 62.78
TQQQ lot 2 65 CC cb 63.23, new trade, small account only 1-2 contracts
TQQQ lot 3 65 cc rolled to next week 65.5 for 0.25 credit. Cb now 62.98
TQQQ lot 4 66 CC cb 65.02 new trade.
TQQQ lot 5 65 cc cb 63.90
Looks like a lot of TQQQ but each account only 1-2 contracts, I am diversified elsewhere. However I have noticed that my more concentrated accounts are doing much better. Better to be a specialist than a general practitioner like me, at least for trading. Also have noticed the more you get direction right, the better the non directional trades do better. Will keep working on being better at directional bias.
A few other changes. No more #pietrades on earnings. Last 5 out of 8 went bad and basically flattened my equity curve for the last 4 months. Would have done much better without those. If I do them will use spreads in advance. Without those 5 losing earnings trades I could have paid off my wife’s car.
Converting deep ITM #pietrades into #fuzzy is a very effective risk reduction tool. Allows you to limit margin but also keep selling premium weekly and looking at 100% returns over 6 months if I keep them going. Probably best tactic for small accounts.
I will be moving most of the #pietrades over to ETFs and leveraged products to avoid the single ticker risk. The ladder idea works well for this 45 DTE and closing/rolling after 3 weeks.
LABU STO the 10 DTE 85 put for 1.9. Cb 83.1 if assigned but more likely will roll. With the pull back in the biotechs there is good support around 85 for LABU.
SQ BTC the 70 put expiring this Friday for 0.11. Sold for 0.95 last Thurs.
EOG conversion to put #fuzzy
BTO the 2020 EOG 115 put at 13.00 creating the 115 calendar with short expiring 35 days.
cb now 11.2 since the initial sale brought in 1.8. Another #pietrade #earnings gone wrong/bad and managing before it get too far ITM. Will manage this from put side.
Other reason was to reduce margin requirements so I can stay in some other trades that are finally working out.
With 69 weeks left only need to cover 0.17 per week for zero cost basis.
I think I am done with earnings trades for a while. The option prices do not adequately reflect the volatility. Yes the premiums rise into earnings but the move is bigger than expected so you still end up losing.
AMAT which I had almost recovered from previous earnings down 6.2% so will probably take another 12 weeks to break even. Now will have to sell below cost basis so will have to watch any reversal closely.
WDC, Mu total crap. Both beat earnings and expectations and have traded down 11-14%. At least MU looks like it may have found a base.
I can get same results using SMH for the chips without getting burned on earnings.
Be happy I did not sell puts in NVDA or it would have gone the other way 🙂
Have a great weekend!
With the drop yesterday can pretty much roll everything instead of letting call out or assign. Bad few weeks for MU and WDC down 11 and 14% respectively. They were converted to #fuzzies so a little easier to manage now but this is the only account showing a drop.
New trade STO SQ next week 70 put for 0.95.
MU 55 leap 50 call rolled a yesterday dropping cost basis to 11.26
WDC 60 leap 65 call rolled yesterday dropping cb to 18.01
EOG 115 put 36 DTE was challenged yesterday. Cost basis 113.2 if assigned.
This made me realize an easier way to manage deep ITM #pietrades is to convert it to a put leap #fuzzy. Takes out the margin requirement. If keeps dropping can manage it to a put diagonal. If reverses can either add a call side or keep rolling the put up. As you do that the margin requirement will increase but still much less than naked puts. If I had done this with MU and WDC instead of converting to the call side I would be making $ now. With any leap strategy, the short option strike is what determines the profit loss at the expiration of the short option. Going forward I think this will be my preferred strategy but only for deep ITM puts (5 points or more). Otherwise will manage as a regular weekly #pietrade.
SPX hedge rolled next week 2550 short put out to 15 DTE for 0.6 credit. Hedge only costs 1.2 now and if we head to 2550 will still make 12k. Hope I don’t need it. Next month will use back ratio or risk twist.
TQQQ batch 1 65 cc expires tomorrow rolled to next week for 0.9 credit. cb now 62.98.
TQQQ batch 2 65 cc expires tomorrow rolled to next week for 0.9 credit. Cb now 63.23
AMAT batch 1 47 cc rolled out 2 weeks for 0.33. Cb 48.91. Few more weeks to cover it.
AMAT batch 2 47 cc rolled out 2 weeks for 0.31 credit. Cb now 45.88 and if I can’t get more than 0.5 on next roll will let it assign and move to another #pietrade
#fuzzy XBI 87 and 95 leaps with rolled the 96 and 96.5 short calls down to 95 for 15 DTE for 1.1 and 10.6 credits. Cb now 7.52 and 4.04 as they were separate batches.
TOS calculates diagonals weird. They are all showing a loss on the graph but nearly 20% reduction in cost in 1 month so make sure you keep track of your cost basis. In the end that is all that really matters with any trade.
Hope everyone is having a good week. Not much to do until next week now. At least I tripled my theta decay with all the rolls.
WDC #fuzzy rolled the 37 DTE 70 call down to 65 for 1.25 credit. Cb now 17.78.
Some stuff on sale now for anyone that has cash. MU down 6.1%. Most of the chips are down. IBB, LABU, XBI all down nicely.
Interesting but a lot of the triple products are not down as much as some of the individual names in the indexes.
Personally I am finding them easier to trade. Not moving all my money into them but much easier to handle a 6 point drop in LABU than a 4 point drop in MU because the premiums are so much higher easier and quicker to work back to even or profit. Usually only takes 2-6 weeks. With the lower premiums I was stuck in GM for 22 weeks, looks like WDC and MU will be long termers as well.
Reversal signal on /ES on the new indicator, can’t post it, on a different computer. What is @fibwizard showing.
#fuzzy roll.
Taking advantage of the weakness in the chips. Rolled next week MU 54 call down to 16 DTE 50 call for 1.17 credit. Co
Probably do the same later with WDC if I have time.
Selling below the long leaps now so will have to be aggressive about rolling/managing.
New tool. Not advertising here but works well in chop. Not going full directional like @fibwizard but I think this will help with my #pietrades by pointing out the actual pivots in real time. I just can’t make it work for me because of schedule, wish I could I know there is money to be made there. So I need something that does it for me. Alphashark calls it the tide trader or something like that. Uses a combination of volume, momentum, oscillator (can’t figure out which one but I think RSI looking at the math) and ATR so it is a Frankenstein indicator. However, it already helped me to hedge my SPX hedge as I saw the reversal. Takes some adjusting to each name. You have to figure out which ATR works best for what you are trading or you get too many or not enough signals. On /es and most stocks a setting of 2 is god but NFLX/AMZN take 10s. Default is 0.5 and just too many signals.
Special is $259 but I don’t know how long. An upper indicator, the big arrows and a lower. Increasing green wave go long. Purple dot possible reversal point. Increasing red wave short. Can change it for any time frame. Easy enough even I cannot miss the signal. Only traded with it 2 times so far but is helping recover MU and WDC positions by letting me sell options closer to the money.
Will update as I use it.
#pietrades and trying to get some theta decay back, almost went negative on the core account.
New trades
TQQQ lot 1 65 cc expires this Friday for 63.88.
TQQQ lot 2 65 cc expires this week for 64.13.
SPX hedge, STO some 11 DTE 2550 puts to offset the decay loss on the long hedge. Sold for 1.1 dropping cost basis to 1.80. Should also be able sneak in another sale and then roll as calendar, back ratio, or risk twist. Still playing around with the most efficient hedge.
Sea of red in my core account (of course the most important one) but the other accounts theta is doing its job. After I clear out the WDC, MU earnings drops will be moving more toward ETFs to limit some of the single stock risk that keeps being affected by tweets. SMH will give coverage to that sector with decent premiums.
Not going full directional or advertising for them but alphashark has a new tool that picks up reversals very well. Currently it is $259, increases to 999 soon. Installed it last night. Have to adjust settings based on ATRs but seems like it works well. Seems to nail the reversal within a half bar on any time frame. Added it to some of my other indicators and will post some trades with it after I use it for a while and figure out the settings.
#pietrades and #optionsexpiration
Fragmented trading day here. They were working on lines near our house and internet kept going in and out which will explain my weird WDC trade.
WDC, keeps going down. Converted to LEAP #fuzzy earlier in week. Was trying to roll to next week at 70 but because of the internet issues it somehow rolled to 66. Ok so took in a lot of cash but then the internet went down for a few hours. Of course during that time WDC reversed so was losing $ on the new trade and deltas were already flat. So rolled out to 43 DTE and up to 70. Took in 1.32 on the 66 call but had to buy them back and roll for 1.02 debit. So anyway after all that, now have the 60 LEAP 70 43 DTE call spread for cost basis of 19.03. If we rebound will buy back 2-3 of the short calls to let it run. Break below 65 will collar it to prevent further losses. As long as it stays 65-70 should break even in about 6-8 weeks.
MU 55/54 diagonal looking ok. Cb 12.43.
EOG 43 DTE 115 put cost basis at 113.20.
TQQQ batch 1 will assign tomorrow at 60 for a 2.21 gain on each contract. Reset Monday, hopefully after at least a little pull back.
TQQQ batch 2 will assign at 59 for 1.75 gain per each contract. Both these are nice 2 week pay checks! Reset Monday.
AMAT batch 1. Rolled 47 cc out a week for 0.52 credit. Cb now 49.24. A few more weeks of rolling then will reset as #pietrade again.
AMAT batch 2 rolled 47 cc out a week for 0.5 credit. This is showing a profit of 0.81 per contract but may keep rolling if it stays in range.
XBI 87/96.5 and 95/96 #fuzzy. Waiting for more decay and will roll next week. Cost basis of 8.62 on first batch and 5.1 on second.
SPX #hedge 2550 put has lost a lot already but gained 0.15 late in the day. Currently 1.75, bought for 2.9. Hope I don’t need it but will roll it at least a week before it expires and change it to a back ratio or risk twist to limit costs. That will be a more efficient hedge.
Hope everyone is having a good week and expiration. Some new trades will be added Monday.
#pietrade conversion to #fuzzy
Sold WDC for 67.16 against cost basis of 72.34. BTO 60 leap in 2020 for 14.15 bringing new cost basis to 19.33. With 73 weeks left only need to collect 0.27 per week to cover. Already short the 70s 16 DTE.
Freed up 60k in margin for other uses.
I will be doing this a lot more with #pietrades that go way ITM. Much cheaper way to stay in the trade, less to lose, less to make up and plenty of time to do it.
Question for @fuzzballl since you do the most of these. On an annualized basis what are realistic returns for these? I personally come close to 100% but may not be managing them the best.
Early #pietrade rolls. Market giving some gifts so taking them early.
MU 55/53.5 #fuzzy rolled the 10 DTE 53.5 call up to 54 and 1 week out for 0.19 credit. Cb now 12.43. Almost recovered all the earnings losses. 2 more rolls should break even then will keep it going for profit.
WDC 10 DTE 69.5 CC rolled out a week and up to 70 for 0.11 credit. Cb now 72.34. A few more weeks to break even but may convert to a #fuzzy before then.
EOG wild 4 days ride. Down almost 5 when I sold the 43 DTE 112 outs for 1.29. Now back up and they were down to 0.60 so rolled out to new 45 DTE 115 for 0.5 credit. cb 113.2 if assigned. This was planned as a 3 week trade but made 50% in less than a week so will take it.
Sitting on my hands until Thurs. now.
Thanks for all the ideas below. I gave this some thought while mowing the lawn, push mower, ear plugs in, so I tend to think trading issues over while I am doing it and have about 1.25 hours to do that every week because it keeps raining and my grass keeps growing. Most years it is brown by now and I take a few weeks off mowing. Some of my best ideas have popped in my head while mowing but also some of my dumbest (no you really shouldn’t build a mini plane using a lawnmower engine, well you can but does not make it a smart idea and you would likely end up making a flaming hole in the ground).
So here are the best options I can figure out.
1. Straight SPX/SPY put purchase. Most months will lose almost all of it. Have to adjust as the market moves. If your hedge was set up at 2700 and the SPX is now 2800 your hedge will not cover as well as it did when you put it on. Maybe 1-2 times a year pays out decently, once every 15 months is a lottery ticket. Can sell other options to pay for it but bottom line is you are buying insurance and we all know how that usually works out. Can roll it to at least recover a little of the premium you paid. This is what I put on Friday.
2. Risk twist. Cheaper than above good downside protection but leaves a gap at expiration where max loss can still occur. Same issue as above, needs to be adjusted as the market moves but starting 90 DTE gives you more time and less expensive even if doing 4 times a year. I suspect the payouts are about the same as straight puts since you are long puts on a ratio. Switched to SPY for example. 3 long, 2 short ratio with a 10 point spread. Similar to a back ratio or a modified butterfly.
3. Credit spread on SPY or SPX or /ES but you have to act quickly on adjusting. Say you sold the SPX delta 16 put and then bought an option 10 points below. For example sell 10 the 2600 and buy the 2590. If the delta on the short makes it to a delta 30 you would buy 3-5 of 2595 puts to effectively create a back ratio. No graph, we have discussed this as an adjustment in the #spycraft discussion. The only issue with this is you have to act quickly sometimes and occasionally the move is in the middle of the night like on 8/24/2015. The /ES was down 300 points when I woke up and any adjustment then was limiting losses, not making more $. At that point it was going to be painful no matter what I did. I suppose if you traded /ES you could adjust it in the middle of the night or even SPY and SPX now. The big advantage here is you take in a credit when you put the trade on so buying options could be taken out of the credit. On a big move buying extra options will cost more though. Likely would only have to adjust 2 times a year and you could also ladder and start 45 DTE to make the most of theta decay until the move happens. You also need to leave enough room between the strikes so that you can buy in between. The others are set and forget for a while, this one would need checking every day like any sold option. Most of us here do that anyway.
4. Front spread/back spread or back ratio depending on your vocabulary or possibly a #rocketmanhedge here?
On SPY assuming a 10% correction which I did with all of these, you sell one 265 put and buy two 260 puts for $175 debit. The debit on the risk twist above would be $219 for a similar looking graph. Also keep in the mind the straight put purchase is for 30 DTE, the risk twist and the back ratio are set up for 90 days and the credit spread at 45 DTE. So there are some timing differences and the time component would need to be managed on all of them. Front spread is buy one sell 2 so really would not help in this case, unless it was a call spread and set up for a credit. Then in a correction you would keep the credit.
So the winner is? Up to you. I suppose it depends on what you want. Lottery ticket go with straight puts but most months like a lottery ticket you will lose your money. The risk twist and the back ratio decrease the cost but still need a really big move to pay off. Advantage is you can get another 2 months out of them for a cheaper cost than the monthlies but in either case as the market moves would need to be adjusted. A 10% correction from 2800 is going to be a lot different strikes than a 10% correction from 2600 on SPX.
Finally we have the credit spread converted to a back ratio. Paid up front, theta helps you, but on those 5 standard deviation moves might not have time to pull the trigger at the right moment. But at least you are then risk defined and can probably roll until the market settles down. I was able to do that with a few of my accounts on 8/24/15 and actually broke even after about 3-4 weeks. Still there was a lot of red on the screen until then. Also the markets became really wide and it was hard to get decent fills. TS and TOS did ok with it, optionsxpress and fidelity not so much and is why I do not have accounts there anymore.
My personal vote is probably the back ratio or a credit spread adjusted to a back ratio early. Cheaper than a straight put purchase, longer acting, but still pays out the lottery ticket when needed and simpler than a risk/twist, less moving parts.
Floor open for discussion. Anyone have any other or better ideas please let me know 🙂
I am at the point in my trading career and my accounts are big enough a few of them need insurance most of the time. I plan to do these going forward and will report on what is the best cost/benefit ratio.
Still raining here and the VIX is down to 11.82. Cheapest time to put on a portfolio hedge. I fully expect these to expire and lose all my $ but 1-2 times a year it may be a lottery ticket! This is based on the recommendation from option income masters (a subset of OIB). They hedge the entire portfolio almost monthly, after a big drop they cash out and put the money back in at the bottom. They finance the hedges by selling other options.
I am only hedging my core account, everything else already spreads or cash hedged so BTO 2 SPX 2550 puts 35 DTE. In a 10% correction these should be worth 11-12k which would offset the losses on the account in a 10% correction and then could close for cash to redeploy.
Hope I don’t need it but will see how it works.
#pietrade but new style. 42 DTE EOG 112 put sold for 1.3. Good earnings last night but good drop today. plan is to close it or roll it around 22 DTE or 50% profit whichever comes first.
Now going to beach to kiteboard for bday as soon as the tstorm passes!
#pietrades and #fuzzies
MU 2020 55/55 calendar rolled out to 15 DTE and down to 53.5 for 0.71 credit. Cost basis now 12.62
WDC assigned on 7 contracts 75 puts at 73.71 cost basis. I am sure the other 3 will assign so sold 10, 8 DTE 69.5 cc at 0.93 dropping cost basis to 72.78.
I can see both of these are reversing already so will end up adjusting.
TQQQ 60 cc rolled out to next week for 0.9 credit. Cost basis now 57.79 batch 1
TQQQ 59 CC rolled to next week for 0.7 credit. Cb now 57.25 batch 2
AMAT 47 cc rolled out next week for 0.41 credit. cb now 49.76 on batch 1
AMAT 47 cc rolled out next week for 0.35 credit. Cb now 46.64 on batch 2. Will let this one call out if ITM next week and this batch repaired from earnings after 5 weeks. However, this is a small account and I think I can do better with a #fuzzy.
Seems like 5 out of my last 8 earnings trades all went bad. Maybe time to reconsider earnings trades, at least as a #pietrade. Probably better to skip that week then re-establish the week after.
Also the triple ETFs have been easier to manage. Not saying lower risk, but easier to manage. The extra premiums allow you to roll easier, move strikes ITM, OTM, or ATM and still take in good credits. The higher premiums create more opportunities.
From an income standpoint #pietrades make the most income but on a percentage basis the #fuzzies are doing better. Also better for smaller accounts.
So what does this mean, see below for the 45-22 DTE ladders for #pietrades. Small accounts will use spreads and #fuzzy, and #supercharger.
Have officially made back 33% of the SVXY losses. 3 accounts have fully recovered but 2 accounts have a long way to go. Having to be more conservative with those accounts as well because they are small/tiny now and another loss would wipe them out so the other reason I am looking at longer duration trades.
More TT research confirming 45 DTE is ideal for selling OTM options but with a twist. Closing at 22 DTE showed the best results. They also looked at other expirations and different management times.
https://tastytrade.com/tt/shows/market-measures/episodes/managing-earlier-varying-durations-07-17-2018
Quicker than usual for them, under 10 minutes.
I may migrate some of the #pietrades and TT work into one hybrid trading plan. #pietrade ladders started farther out but managed quicker, usually only 23 days. Will start a new experiment.
#pietrade conversion to #fuzzy
MU sold stock for 52.61 against cost basis of 55.33 for 2.72 per share loss. Took the proceeds and bought a 55 2020 call to create a LEAP calendar. Frees up 40k in cash/margin for other trades.
Now my new cost basis adding in the purchase of the leaps at 10.60 is 13.32. Will sell weeklies against it with goal of decreasing cost to zero at some point. Have 75 weeks left (already have short 55 for next week) so that means only need about 0.17 per week to break even. Anything extra is BONUS.
I may do this more often for #pietrades that move a lot and are taking longer than normal to get back to even but I still want to stay in the ticker. MU has good premiums and want to stay in it but did not want to have 1000 shares tying up so much capital.
May do the same with WDC later in the week.
Will keep posted as to how it works out long term.
Late post, too busy yesterday and nearly everyday. Work is decreasing my trading profits. s
MU rolled the 55 cc that expires Friday out a week for 0.44 credit. Cost basis now 55.79. 2 more weeks should break even then can decide whether to keep rolling for profits or reset.
I may convert this and WDC when assigned to #fuzzies to free up margin for other #pietrades
In 2 separate IRA accounts, small size
TQQQ buy writes at 59 and 60 cc for 58.69 and 57.95 debits.
Found an adjustment to these that will help returns. For IRA and other tax deferred account will be doing more buy-writes and straight covered calls, often ATM or a few strikes ITM. Will roll if at or near the money. If deep ITM will let assign and reset the following Monday.
For margin accounts will usually start with a put sale (better margin rates than cc) and then if assigned convert. That little tweak looks like it will be worth several extra percentage points over the course of a year. Also less holding through weekends when harder to adjust trades.
As of now looks like WDC will assign this week at 75 with a cb of 73.71 so will convert to CC next week.
One good, EXPE up 10.40 so the 115 puts crushed to .025 and since I don’t have any other trades lined up at the moment will let it expire.
One bad, WDC down 5.61 now. I am short the 75 puts for next week. About $300 left in time value so will let that erode a little more and roll it next week.
Everything else looks like it will expire or call out as I posted yesterday.
Biotechs down today, LABU down big so it may be a potential trade for Monday. Also looking at SMH 21 DTE #pietrade and a few others but too busy to look more than that today. Will find some over the weekend.
Have a great weekend!
#optionsexpiration maybe, have 2 earnings plays that may not cooperate after the close today.
MU 55 cc rolled yesterday for 0.44 credit. CB now 55.79. 2 more rolls should put it in the green. Decidied not to #fuzzy it yet since so close to breaking even.
WDC 75 expires next week. Earnings today. Up 1.23 to 76.87 as of this writing but has been bouncing around all day.
EXPE 115 put expires tomorrow. Earnings today. Currently at 127.38 but it can move much more than that on earnings.
FAS 65 CC will let assign tomorrow. cb 63.10 so 1.9 profit on each 1 lot.
TQQQ 59 cc will let assign tomorrow. 57.80 cb so 1.2 profit on each contract.
AMAT Lot 1 cc at 47 rolled to next week for 0.38 credit. cb now 50.17. A few more weeks should be able to scratch it.
Lot 2 47 CC rolled for 0.41 credit. Cb now 46.99 so in the green after the earnings play went south.
XBI 87 Jan 2019 and next week 96.5 cost basis 9.72. Looking good at the moment but still a lot of time value in the short options so will roll next week or close for profit. In that case may re-establish new range.
Only made $708 total last week while on vacation but not bad for out having fun, the previous week was awesome so no complaints. But that confirms to me trading weeklies definitely brings in more cash if you are income trading than selling longer dated options. The weeklies also give faster compounding. However, I will be doing more 21 DTE #pietrades going forward, they need a lot less adjusting and my core account is finally big enough again to run 3 names for 3 weeks each.
On the smaller accounts (under 10k) mostly #fuzzy or variations.
Efficiency of capital round 3 or 6, lost count.
While sitting in airports and riding in the plane was thinking about how to improve #pietrades and any trade you were assigned. Here is what might work, may convert MU tomorrow to see how it works.
1. set up weekly ladders, 21 DTE seems to be ideal except going into earnings. EXPE and WDC are holding most of its time value right up until tomorrow. Less chance of getting assigned, easier to adjust farther out, more premium for strikes OTM. Also they decay quickly enough you can usually roll in 1-2 weeks if they stay OTM.
2. If put deep ITM better to take assignment and convert to covered calls.
3. However, instead of taking the stock long term like I did with GM (22 weeks), may be better to sell the stock at a loss and reset to a #fuzzy using a calendar or lower strike call. Then you are in the trade longer term, cost basis goes up, but the big advantage is you free up a ton of margin to use on more profitable trades. Then just a matter of recovering the initial loss and working the LEAPs down to cost basis of zero.
I may try this as a long term experiment with MU tomorrow, close to break even on cost basis but want to keep collecting MU premiums but would rather not hold the stock for 24 months. This is how I recovered a 17 point drop in SWKS so I know it works. My only concern is could end up with a bunch of #fuzzies when what I really want is #pietrades. However, once profitable could close out the #fuzzy and reset.
Will keep everyone posted.
Gradually catching up and easing back into trading from vacation.
Only a single roll today. More to follow tomorrow or Friday.
#pietrade MU rolled the 55 call out next week for 0.44 credit. Cost basis is now 55.79.
Tomorrow will have EXPE, WDC or not depending on earnings response.
AMAT, TQQQ, FAS, XBI, and second batch of AMAT.
Hope everyone had a good week.
@smasty160 is right, weather was awesome except for the 104° day but even that did not feel hot compared to east coast.
Rolling everything out 2 weeks for vacation 🙂
Some of these are still open positions.
MU 55 call rolled out 2 weeks for 1.27 credit. Cost basis 56.23. Another 2 rolls should bring profit.
WDC 8/3 75 put was sold last week for 1.29
EXPE 7/27 115 put sold last week for 1.90. Both of these are going into earnings as 21 DTE #pietrades.
AMAT lot 1 47 CC rolled out 2 weeks for 0.28. Cost basis 50.83. Will take a few more rolls on this.
FAS 64 cc rolled out 2 weeks to 65 for 0.31 credit. Cb now 63.10.
TQQQ 59 CC rolled out 2 weeks for 0.85 credit. cb now 57.80
XBI #fuzzy 87/96.5 rolled out to 8/3 for 0.30 credit. Cb decreased to 9.72. May reset in 2 weeks by rolling both up a few strikes if it keeps going.
AMAT lot 2 47 cc rolled out 2 weeks for 0.27 credit. Cb now 47.40 so should see profit in another 2 rolls.
That’s it for now. Letting theta decay pay for vacation, at least I covered the airline tickets in cash today on sales/rolls 🙂
Sorry @fuzzballl UAL was cheaper than AAL but we may make the news if we get thrown off the plane 🙂
Have a good expiration and week, check in when we get back but not even taking a computer. Need to unplug!!!!
Chris
Here is a good one for you margin users, looks like 60% of total portfolio is ideal.
https://www.tastytrade.com/tt/shows/market-measures/episodes/puts-or-stock-07-09-2018
WDC 77 put expiring this friday had decayed to 0.25 so rolled it to a #pietrades 25 DTE 75 ing to put for 1.03 credit.
Trying to ladder the EXPE 115 as well but with earnings scheduled for 18 DTE it is not decaying as fast as I would like.
Limited 3 week experiment on using 21 DTE or so for #pietrades seems to be working as I expected. The extra space makes rolling easier and if they stay OTM the decay is fast enough you can usually close or roll in 1-2 weeks.
Use a LEAPS sale to finance SPX hedges. You could sell a LEAPs put or buy write on something you want to own long term, then use the cash generated to pay for monthly puts on SPX but with a twist. They budget for a 10% market correction and only costs about 3% of your income yearly. Most months it expires and you lose everything you put in but in Feb. a few people in the service made a ton. 1 guy had puts worth 55k each while most of us were losing on SVXY. So occasionally the lottery ticket pays off.
Here is how it works. Not saying I am doing this right now but there is potential, especially when VIX is down. I have also heard this called the Hindenburg trade, buy insurance when it is cheap.
With SPX at 2757 as I type this, a 10% correction would put SPX at 2481. You do not want to buy that put because at expiration it would be worthless. What they suggest is buying a put that would have a value of roughly 10k if it dropped that much. So at current prices that would mean buying the 2550 put 31 DTE for 4.5. If we had a 10% drop 1 put would be worth about 8k if we made it to 2481. However, because of the volatility expansion it would likely be worth much more.
Figure out how much insurance you want on your portfolio, then figure out how many options to buy. Keep in mind more options will cost more but will also be a bigger payout when they finally pay out.
I may start experimenting with this when the market is complacent. Don’t think I need a full time hedge. The income masters hedge about 80-85% of the time but only pays off on the big down spikes.
Options Bistro 