hcgdavis 12:56 pm on Thursday, March 22, 2018
Tags: pietrades ( 240 ), ShortStrangles ( 716 )

#shortstrangles Converting some #pietrades to…

Converting some #pietrades to strangles on the weakness. Went for a run, when I left looked like the market was firming, came back to chaos and panic. It was only an hour run!

Anyway STO ANDV 22 DTE 108 call at 0.5 for 95/108 strangle and put side cost basis 94.19
STO UTX 29 DTE 134 call at 0.48 for 125/134 strangle with put side cost basis at 124.03
STO NSC 22 DTE 143 call at 0.85 for 131/143 strangle with put side cost basis at 129.1

If they rebound will buy stock, otherwise it basically doubled theta rate and should be able to roll or close early for some profit.

hcgdavis 11:45 am on Thursday, March 22, 2018
Tags: pietrade ( 143 )

GM #pietrade Rolled the 39…

GM #pietrade

Rolled the 39 CC 15 DTE out to 29 DTE 38.5 for 0.25 credit. Cost basis 38.5. If it cooperates and recovers a little I will let it call out so I can use the capital somewhere else.

This one is not cooperating as a #pietrade lately. Premiums too low for how much it is moving around.

hcgdavis 9:18 am on Thursday, March 22, 2018

/es

The 2665 voodoo line (elliot wave line) seems to have stop the fall today to the tick. Not taking any directional trades today but worth watching.

What do you think @fibwizard?

hcgdavis 9:15 am on Thursday, March 22, 2018
Tags: Fuzzy ( 414 ), FuzzyBear ( 22 ), pietrade ( 143 ), pietrades ( 240 )

#pietrades New trades FAS 3/30…

#pietrades

New trades
FAS 3/30 expiration 65 CC cost basis 63.65
FAS 3/30 exp. 64 CC cost basis 62.70
LNG 4/6 exp 55 CC cost basis 53.79

Existing position or adjusted
FAS tomorrow 68 CC cost basis 67.20 Will let expire then open ATM on Monday. Still has 1.05 time value in it so being a little greedy sine the market makers are being greedy on the spreads today. Work any orders you are trying to get through.
UTX 29 DTE 125 put cost basis 124.51, watching this one closely and may convert to a #fuzzybear if it keeps going.
ANDV 22 DTE 95 put cost basis of 94.69
ERX 15 DTE 21/26 vertical debit at 25.41. If we drop below 26 will convert to #fuzzy
GM 15 DTE 39 CC cost basis 38.75. Problem child I will be rolling for weeks. Goal is to keep selling right at dropping cost basis just to let it clear out then moving on to another name. This one no longer trading well for #pietrades
NSC 22 DTE 131 put cost basis 129.95. This one will probably replace GM in the rotation.

I am starting to notice something with triple ETFs, they are easier to roll and manage than some individual names because the premiums are so high, especially on the call side. FAS can get about 3 ATM and because of the call skew selling ITM CC gives some downside protection. Don’t load the boat with them but getting 100% annualized returns just by selling weekly ITM CC #pietrade syle.

Hope everyone has a good week. My work has been so busy may only get to trade Thursdays for a while.

hcgdavis 6:51 am on Wednesday, March 21, 2018
Tags: pietrade ( 143 )

#pietrade Rolled UTX 16 DTE…

#pietrade

Rolled UTX 16 DTE 126 put down to 125 30 DTE for 0.36 credit.

I could take assignment but with the chop plan to stay farther OTM, roll earlier, and only take assignment at what looks like a base or good price.

hcgdavis 9:20 am on Thursday, March 15, 2018
Tags: Fuzzy ( 414 )

ITM debit spreads

Might be on to something here. I have an experiment running on ERX. 22 DTE 21/26 call spread. I don’t know what the news is, but all the oil service sector names just tanked and are now bouncing. Anyway, I was looking at how hard it would be to roll and it is really easy and often done for a credit.

Adjustment #1 is roll the long out or to a leap and make it a fuzzy. I could add another 9 months for 3.2 or 19 for 7.19. Then you have plenty of time to sell against it.

Adjustment #2 roll the entire spread out a month, could do that for 0.7 credit even going down a strike.

Adjustment #3 roll the short strike down same expiration for credit. At that point you lose some of the profit but still stays green.

I may experiment with some more of these going forward and will share results. Might be a better way to get higher returns with known/controlled risk. That is always a good thing 🙂

Also may be a way to ease into a #fuzzy at a lower cost and not having to initially set up as a long range trade.

hcgdavis 8:37 am on Thursday, March 15, 2018
Tags: pietrade ( 143 )

#pietrade Rolled ANDV 96 put…

#pietrade

Rolled ANDV 96 put 14 DTE out to 29 DTE 95 put for 0.35 credit. Cost basis 94.7 now.

Part of my change in management discussed below. Add credit, move strike farther away and give it some more time for more aggressive management if needed.

hcgdavis 8:17 am on Thursday, March 15, 2018
Tags: Fuzzy ( 414 ), pietrades ( 240 ), SPYcraft ( 95 )

#pietrades STO the next week…

#pietrades

STO the next week 8 DTE FAS 68 CC at 67.20 in IRA, only 300 shares.

Tomorrow have some expirations that look safe for now.
WDC 87 CC will let call out
FAS 67 CC will let assign

That’s all for this week. Mostly need to sit on my hands and let theta do its magic.

I need to place some #fuzzy trades and #spycraft trades to improve ROI but to be honest, my trading confidence is still low after the SVXY debacle. To have an entire year’s worth of trading profits wiped out by one trade has been a major gut punch. Luckily I learned to segregate accounts after 8/24/2015 and only affected 2 out of 7 accounts. I know how to trade, fairly good at it, the SVXY was an isolated event, but still sits in the back of your head and prevents you from hitting the send button on some trades I know are good.

After I successfully manage what I currently have on and have a few cycles of profitable trades it should get some mojo back.

As I am reading “Trading options for edge” realize I probably need to manage the positions and portfolio by the Greeks more, especially delta and gamma. Learning some new hedging techniques that should be very beneficial and will post them as I use them and learn them.

hcgdavis 6:18 pm on Wednesday, March 14, 2018

Happy PIE day, 3.14 to…

Happy PIE day, 3.14 to all you fellow math/science geeks out there!

hcgdavis 10:53 am on Wednesday, March 14, 2018
Tags: pietrade ( 143 ), pietrades ( 240 )

#pietrade STO NSC 30 DTE…

#pietrade

STO NSC 30 DTE 131 put at 1.05. 10 points OTM currently. 5 contracts.

My several rolling tickers in the core accounts are now NSC, UTX, ERX, GM, FAS, ANDV although I may replace GM, it has not been trading as well as it used to.

I have been selling #pietrades into strength, meaning selling the puts on the days the ticker is down a fair amount.

Should have a few more tomorrow, maybe or I might go skiing, season winding down in mid atlantic but still some patches of snow to make a few turns.

hcgdavis 9:08 am on Tuesday, March 13, 2018
Tags: pietrade ( 143 ), pietrades ( 240 )

#pietrade STO the 16 DTE…

#pietrade

STO the 16 DTE ANDV 96 put at 0.95.

This was my best performer when it was TSO, was reborn as ANDV but was having trouble finding a range after the merger. Looks like it has stabilized and the options are trading with decent volume again.

I am tweaking the #pietrades a little. Account is big enough now to move up to 5 contracts on 3 tickers at a time. Was doing 3 contracts on 4 names but I think reducing the # of tickers will actually improve returns.

hcgdavis 10:54 am on Monday, March 12, 2018
Tags: OptionLadder ( 132 )

#optionladder STO UTX 25 DTE…

#optionladder

STO UTX 25 DTE 126 put at 1.13. Good support at 129 and 125.

hcgdavis 8:21 am on Monday, March 12, 2018
Tags: Fuzzy ( 414 ), SyntheticCoveredCall ( 21 )

Mini experiment, if it works…

Mini experiment, if it works will call it #syntheticcoveredcall although that hashtag already exists I think it is appropriate. @jeffcp66 if you want to change the name let me know.

Ok, here is the set up. You have to have a slight directional bias or at least think it is going to be flat or only down/up a little. But you can get about 10% protection.

Buy a deep ITM call or put and sell a slightly ITM call or put as a vertical. I used to do these and they generally worked, but had one go out worthless once and just stopped doing them. Now that I know how to roll options much better this may work out better than CC. Also I think bigtrends and hughes used to do a lot of these.

So I was just filled on 25 DTE ERX 21/26 call spread for 4.42. It went through quickly, could probably get a better price. 10 contracts max risk 4450 or so and max profit 580. 13% return in 25 days compared to the CC which would only be 3.5% and much less out of pocket expense.

What could go wrong, deep correction. Break even at 25.54. If we start dropping below that I can either buy some puts or roll the entire spread down, probably at even or slight debit.

Either way, only one way to find out for real, so will update as it moves around.

#fuzzy

hcgdavis 4:25 pm on Sunday, March 11, 2018
Tags: OptionLadder ( 132 ), pietrades ( 240 ), SPYcraft ( 95 )

#pietrades, #optionladder, and #spycraft Spent…

#pietrades, #optionladder, and #spycraft

Spent last hour looking for trades this week after finishing taxes :). Not much in the way of #pietrades for the week, everything is extended and the decrease in vol sucked out some of the juicy premiums.
The best I can find is the BIB 62-63 CC depending on how aggressive you want to be. Other option is the put side but have to stay close to the money to get any good premium.
Also looking and ANDV (the old TSO) around the 100-103 level either CC or puts, your choice they are at parity.
GM assigned over the weekend, will sell 39 CC a few weeks out. Cost basis 39.3.
LNG already set up for Friday at the 55 CC.

With that in mind, may go out 26 DTE today 25 tomorrow and set up some ladders to give some more downside protection. Bunch of tickers there, AMGN, ANDV, CVX, MAR, MON, NKE, NSC, UNP, PSX, UAL, VLO, XBI. The 20 delta puts all have good premiums on these and don’t mind taking some shares if assigned.

#spycraft on hold. Looking back the last several weeks, the expected move on SPX/ES/SPY has been exceeded 3 out of the last 5 weeks both to the up and down side. That means the options are not priced correctly, we are not making enough for the risk. Once the pricing is back in line, or the vol. is higher to reflect the movement of SPY will restart. Also going forward will manage by buying in between the strikes if it looks like the short strike will be breached. See previous discussions for the specifics.

Hope everyone had a good weekend!

Will decide what to do with some of these trades at lunch time tomorrow.

hcgdavis 7:51 am on Thursday, March 8, 2018
Tags: AtomicFuzzy ( 12 ), Fuzzy ( 414 ), pietrades ( 240 ), SPYcraft ( 95 )

#pietrades First positive week since…

#pietrades

First positive week since the SVXY melt down Feb 5-6, 2018, so that is a good thing. I think the bleeding finally stopped, only 1 more contract I can be assigned on at any time.

If I can keep making the same amount each week (unlikely) only 33.3 weeks to get back to all time highs but about half that to get to even (cost basis). What I lost was mostly house money but it was enough to buy a real house 😦 ouch!!

LNG rolled this week 54 CC to 2 week 55 for 0.45 credit. Cost basis now 54.2 after being assigned the 55.5 put last week. Next roll down should result in a profit anywhere around 54.

Unless a major move tomorrow I expect to be called out on (hopefully there are no stupid tweets!)
FAS 66, 67, 68 CC
MAR at 138
NSC at 140
GM 42.5 put. Taking stock, can’t roll it anymore for a credit so will take it and sell CC. Missed the dividend, I think it is today.

Have finally finished taxes and full year review. Based on what won and what lost going forward my trading plan is contracting dramatically to only 4-5 trading tactics.

1. #pietrades
2. #spycraft and credit spreads with the new adjustment technique
3. #fuzzy and maybe try a few #atomicfuzzy
4. put ladders with fuzzy adjustments if they go the wrong way
5. VXX put debit spreads after volatility spikes

Everything else worked until it didn’t and either was flat but required lots of trades or worked really well until it blew up. Goal is to recover what I lost, then keep weekly income coming in, and most importantly do not lose any money again!

Hope everyone has a good close to the week, too busy tomorrow to check in.

hcgdavis 4:24 am on Tuesday, March 6, 2018
Tags: VXXGame ( 769 )

More thoughts on SVXY #vxxgame….

More thoughts on SVXY #vxxgame.

I closed out all the SVXY stock I was assigned on yesterday because with the new structure, I just don’t see it taking off like it used to even when back in contango. With the VIX down exactly 0.96 this morning, SVXY only up 0.07 or so. The big gains we were seeing before Feb were from years of accumulated contango. Looks like we will have some 2 sided markets for a while and that hopefully will keep the VIX higher, good for selling options as @fuzzballl pointed out yesterday.

Still reading the new Sebastain book but have already picked up a few pointers from the market maker side. Only be long volatility for short periods of time. Do not be short unhedged volatility (see SVXY and XIV implosion), buying puts on VXX long term has shown good risk adjusted returns. However, I would take that 1 step further and suggest buying VXX put spreads, especially after spikes. Looking at 17 DTE VXX put spread, buy the 45, sell the 40 costs 2.86 at current prices for 5 dollar max profit or roughly 1:1 profit to loss ratio. I don’t have the cash or margin at the moment, but will be looking to use some of these as we go forward. You could even go ITM for less risk and still come out ahead.

Rest of the week just sitting on my hands letting theta do it’s thing. Have a good week!

hcgdavis 10:29 am on Monday, March 5, 2018
Tags: Fuzzy ( 414 ), pietrades ( 240 ), VXXGame ( 769 )

#pietrades and #vxxgame Looking at…

#pietrades and #vxxgame

Looking at the new structure of SVXY, it will take decades for it to get back to 100 (just my opinion) so rather than sitting on dead money, I closed out all my SVXY stock from 12.34-12.40 at large losses no longer just a paper loss. But that is so I can use what’s left to make some money back. It will take about 2-4 years to get back to where I was if I can avg. 50% returns, slightly less if I can do better. Unfortunately one of the disadvantages of going back to small accounts is you lose the leverage, especially on non-margin accounts so I am having to be more conservative. I still have one contract of SVXY at 50 for Jan 2019 that has not been assigned. Hopefully they will wait…..it was easy money while it lasted but I think we all have a better understanding of the risks in SVXY now!

At least I only trashed 2.5 accounts this time, in 2015 it was my main trading account so at least not as bad as then on a percentage basis. On a dollar basis it was more 😦 though.

With that in mind and some of these orders are still working but should go through.

1. FAS 68 CC this week for 67.15
2 FAS 66 CC for next week at 65.11
3. WDC 87 CC for next week for 86.09
4 LNG CC (assigned over the weekend at 55.02 cost basis) 54 CC at 0.4 cost basis now 54.65

$765 in premium for 12 days, far away from what it used to be but all of these have a little downside protection in them and should not go to zero like SVXY could. Bringing some money in every week is better than a loss or having it just sit there.

Will add some long term #fuzzy in a few weeks as they can have 100% returns on capital over a year.

hcgdavis 4:52 pm on Sunday, March 4, 2018
Tags: pietrade ( 143 )

#pietrade candidates for this week…

#pietrade candidates for this week and have some on as well.

In no particular order, just best ROI I could find on stocks that are not over-extended or at least mid range of their ranges. Most of these expire Friday so only 4-5 DTE.

1. FAS 66 strike CC
2. ERX 25 strike CC
3. WDC 87 CC or put sale your choice. Personally the CC has a little better return.
4 BIB not a true PIE trade, it is 12 DTE but the 56-57 CC are juicy
5. AAL 52.5 CC or put sale. Skew is to the CC side a little.

Already have
6. GM 42.5 and will take assignment Friday for the dividend then sell CC against it.
7. MAR 138 CC
8. NSC 140 CC

If anyone else has any others please post. I will likely trade the WDC or BIB in IRA and the AAL and ERX in the smaller accounts.

hcgdavis 4:36 pm on Saturday, March 3, 2018

Assigned on ERX CC at…

Assigned on ERX CC at 26 in 2 accounts. Forgot about these until the email showed up this morning.

Wish I could combine the 7 accounts but alas they all have different tax structures so need to be separate.

Looking at some of the leveraged ETFs you can reach a 100% return on capital just selling CC against them even ITM. Just make sure you have one that won’t go to zero like SVXY or XIV. Some of the inverse ones can do that as well. I was talking with the options income blueprint guys the other day and they stopped trading them because one of the inverse leveraged financials dropped from 2000 to 10 and has been there ever since after the recovery in 2009. Wish I could remember the ticker but I deleted the email by accident. It was similar to SKF but that was not the ticker.

Hope all the right coasters made it through the storm, we had a bunch of wind but no snow 😦

hcgdavis 9:00 am on Friday, March 2, 2018
Tags: OptionsExpiration ( 794 ), pietrades ( 240 ), SPYcraft ( 95 )

#pietrades and #optionsexpiration Not much…

#pietrades and #optionsexpiration

Not much today, taking assignment of LNG puts at 55.5 strike. Cost basis 55.02. Start selling calls on Monday.

Rolled NSC 141 covered call today to next week 140 for 1.40 credit. Cost basis now 138.57.

Already rolled GM to next week, will take assignment, collect dividend then sell calls. Cost basis 39.3

MAR 138 does not expire until next week because I hit the wrong button on Monday when I sold it.

Once I clear some of these out will restart #spycraft actually using spy and will adjust by adding in the middle calls/puts if needed. First adjustment would be a roll like @jeffcp66 but if it keeps moving then try the new style.

Will set up 45 DTE and each 3-7 days add new cycle. Once 3-4 weeks rolling manage it like a continuous ladder of credit spreads.

hcgdavis 1:39 pm on Thursday, March 1, 2018
Tags: SPXcampaign ( 2,265 ), SPYcraft ( 95 )

Credit spread adjustments, will be…

Credit spread adjustments, will be good for #spycraft trades and #spxcampaign among others.

Reading the new book “trading options for edge”. Fairly technical but about half way through now but hit on an adjustment for spreads that is so simple, why didn’t I think of that? Maybe even easier and more profitable than rolling or can at least scratch a trade.

For this to work you have to set up a credit spread that has at least 1 strike between them. For instance you could not do it with a 267.5/267 spy spread but you could do it with a 267.5/266.5. Also need to keep some cash ready for the adjustment.

So if your short strike is in danger of being breached, just buy a few options between the strikes. So say you had the 268/263 spy put spread and about to breach the 268 strike. Say you had 10 contacts, you could buy 3 or 4 of 265 puts and it would basically neutralize your gamma and delta risk. The other benefit is if it keeps moving once you are past your long strike would start showing a profit again because you are net long options and basically have a back ratio spread, just with tweaked strikes. Would work great on a day like today.

Worst case scenario is it stalls out after breaching your short strike but at least you have reduced the max loss a lot and if there is still enough time in the trade you may be able to scratch it for even.

As I said, duh, why didn’t I think of that. I have 8 different ways to adjust a losing credit spreads but this is probably the easiest and most effective. Much easier than diagonal, calendar, butterfly, BWB, back ratio or any of the other adjustments because you do not extend duration. It will all close out at the same time.

I will try it in a week or 2 once I clear out this round of trades. May intentionally set one up to blow up and see what happens.

I also was looking through past #spycraft type trades and the ones that were put on 21 or more DTE had better results than the shorter term ones. More time for a big move to reverse.

Going forward, these trades with be 21 or more DTE and if they need adjustment this will be the primary adjustment.

hcgdavis 11:55 am on Thursday, March 1, 2018
Tags: pietrades ( 240 )

Good thing I chickened out…

Good thing I chickened out on the /es put side of the strangle. Came home and /ES had swung 40 points from high to low. WTF?!

Not to discuss politics but seems like our government wants to start a trade war, that’s all I could find for the big swing. That will not be good for the market but may be good for trading!

I had some #pietrades lined up for tomorrow but they are all ITM on the puts now or OTM on the calls so will just be rolling NSC, LNG, MAR, GM for more premium or in the case of GM and LNG taking assignment and start selling calls Monday.

SVXY headed the WRONG direction, that is not helpful at the moment but at least the adjustment seems to be tempering the drop.

hcgdavis 4:06 am on Thursday, March 1, 2018
Tags: SPYcraft ( 95 )

#spycraft Cue the chicken, BTC…

#spycraft

Cue the chicken, BTC the 2480 puts at 13.75 this morning for $760 loss. I will be away for a few hours this morning and don’t have time to adjust or trade against it.

Will revisit later

hcgdavis 5:44 pm on Wednesday, February 28, 2018

@fibwizard you on line? Are…

@fibwizard you on line?

Are you using tick or range charts currently? I am finding the range charts are responding too slowly now with the increased volatility.

Any suggestions for tick settings for say /es, /ym. /nq, /cl, /gc if you are trading those?

Thanks

hcgdavis 4:12 pm on Wednesday, February 28, 2018
Tags: SPYcraft ( 95 )

#spycraft Booking profits already on…

#spycraft

Booking profits already on the call side of the /ES 37DTE 2480/2900 strangle. Sold the call side for 3.50, BTC after hours (it trades 23/5) for 2.05. 42% profit in few hours so I will book it.

Will leave the put side on and if we get a bounce sell calls again after runup. If we roll down will short 2 futures which would offset the loss all the way down to 2300 or lower, actually the p/l graph at that point shows a 13k profit. The cool thing with futures is you do not always need the same # of contracts as options because of the delta weighting. A future contract carries a hard delta of +-50 and these options are so far OTM you do not need 1:1 ratio for covering like a stock ticker.

hcgdavis 11:15 am on Wednesday, February 28, 2018
Tags: pietrade ( 143 )

#pietrade Rolled GM 42.5 put…

#pietrade

Rolled GM 42.5 put this week to next for 0.33 credit. Cost basis now 39.30 or so may take assignment next week and grab the dividend.

hcgdavis 10:40 am on Wednesday, February 28, 2018
Tags: SPYcraft ( 95 )

#spycraft Finally learned enough (not…

#spycraft

Finally learned enough (not sure smart would be the correct adjective) to keep some cash on the side for when volatility is higher.

STO the /ES 37 DTE 2480/2900 strangle for 12. Only 4 contracts, the account would handle 8 but see I learned enough to keep some extra on the side to go short or long the future if needed for adjustments or be able to add another week later. Theta is 125 a day on this so hope to hold it for 10 days then roll to next cycle or close for 35-50% profit.

From now on I am taking profits early if they are available. Anything 25-75% would be enough.

hcgdavis 5:46 pm on Tuesday, February 27, 2018

Directional indicators

for those like me that are trying to add a little directional bias and trading to their option selling, Raghee from simpler has posted her charts to TOS and tradestation. I can only get the TOS version to work. Pretty simple charts to follow

http://tos.mx/MUhCu7

Here’s an example. Not as clean as @fibwizard but easy to follow. Red short, green long, blue transition. The dots along the 21 ema show buying or selling strength and the boxes are auto plotting darvas for support and resistance. I use them a little on 15, 60, and 4 hour chart.

hcgdavis 8:45 am on Tuesday, February 27, 2018
Tags: SPYcraft ( 95 )

@fibwizard whats your next support…

@fibwizard whats your next support point?

Looking at a #spycraft trade but not sure if I want to put it on today or wait until we find support again.

hcgdavis 10:25 am on Monday, February 26, 2018
Tags: pietrades ( 240 )

#pietrades at the open, sorry…

#pietrades at the open, sorry did not have time to post until now.

BTO NSC this week CC 141 strike at 139.97 on 3 contracts.

BTO MAR next week (hit the wrong button) 138 CC at 137.17 3 contracts.

BTC the SMH this week 103 put at 0.29, sold for 0.89 last week.

STO LNG this week 55.5 puts at 0.45 for 2 contracts in a smaller account

Like that VIX back in contango, down 0.33 and the SVXY up about the same but percentage wise 3.47%. If we can do that every day for a year will break even 🙂

hcgdavis 5:08 pm on Sunday, February 25, 2018
Tags: Fuzzies ( 40 )

Hey @fuzzballl what do you…

Hey @fuzzballl what do you think about bi-directional #fuzzies on range bound names?

I was looking at some of my recovery trades and this may work. Buy LEAPs calls and puts, and sell weekly straddles/strangles against them. You can leave the original longs on, then just move the straddles and strangles around depending on how it moves. On most names could take in $2-4 credits per week.

Would not really need a hedge because you are long the put as well as the call but there may be a margin requirement if your strikes don’t line up after a while. Looking at 1 year leaps it would probably work. 2 years would take a few weeks just to break even. Here is a WDC example using Jan 19 leaps. I used to do this with multi -strike calendars and it was hugely successful until it just stopped working (once the VIX stayed below 15). However, it benefits from increasing VIX.

hcgdavis 4:41 pm on Sunday, February 25, 2018
Tags: pietrade ( 143 )

#pietrade candidates for this week…

#pietrade candidates for this week or next 2 depending on how you want to trade in order I see best potential returns. It was hard to find names not way over extended, these are kind of mid range within their ranges.

1. NSC any strike between 136-140 should work. Personally I am going with 136-137 ITM CC or may go ATM depending on how we open tomorrow.

2. MAR slight call skew but puts are still good.

3. LNG same

4. FSLR definite skew to call side but either works.

Personally I am going CC if there is a skew and I do not have a directional bias.

hcgdavis 11:48 am on Friday, February 23, 2018
Tags: Fuzzies ( 40 ), Fuzzy ( 414 ), pietrades ( 240 ), SPYcraft ( 95 )

A years worth of trading…

A years worth of trading and learning condensed into as few lines as I can write.

Had 5 days off to go skiing but was 70 on Wed and raining since, not good for skiing so am getting my taxes done early this year. I review every trade from the previous year so here are some lessons I learned, a few of them the hard way.

SVXY was my biggest winner until it became my biggest loser. Don’t hold unhedged short volatility. Probably better to use spreads or just buy VXX puts. Even if I had just left the #fuzzy would have limited my losses to 5 k.

#pietrades are very effective but occasionally get one that you have to roll for a long time and ties up a bunch of capital. You can eventually roll it for even or a profit but I think there may be a better way to avoid that but have not discovered it yet. I will be looking for the happy medium between tasty trade 45 DTE and 1 week with #pietrades to see if I can avoid having to roll as much. Recent segment on tasty trade says 30 DTE may be between them. Maybe I will start some positions there on Monday.

https://www.tastytrade.com/tt/shows/market-measures/episodes/shorter-duration-or-managing-earlier-01-12-2018

Managing winners really is more important than trying to save a large loss. Had I just closed SVXY at the end of the day when we were sitting at 70 I would have broken even. Instead now have 70-80% to make up loss.

Diversification is good, but once above about 10-12 tickers, tends to water down returns. I will be trading the same names a lot more this year.

CC can make more than naked puts because of the additional capital gains and skew built into some names. I will be doing more balance between CC and put sales.

#fuzzies are a good way to recover a position that really went the wrong way. Less capital at risk and if set up with a hedge limited risk. However, they take a while to repair a really bad trade. Months in some cases.

As much as I try and have the tools, I just can’t make directional trading work for me. Don’t have the time when I am at work and when I am at home don’t want to sit in front of a computer. However, timing the option sales improves returns and winning percentage. Will sell options more often at the pivot points going forward.

Selling options beats the crap out of any other trading strategies I have tried over the years. All my good trades (except SVXY) started with an option sale as the beginning of a position.

Look at positions instead of a trade. You may lose on sales the first 4 weeks but with recovery eventually can get out with a profit.

Weekly options make adjustments a lot easier.

My fellow bistro’ers gave me a lot of ideas that ended up being profitable. Thanks! 🙂

#spycraft also works and thanks to @jeffcp66 for showing me how to roll credit spreads, however, make sure it is in an account that can handle that. Tradestation cannot which is where I was trading those and with the run up the call sides were taken out but they would not let me roll. TOS fine so will be firing up some spy trades again soon with the TOS accounts.

Keep the ideas rolling, looking forward to trading with everyone again this year and maybe we keep a 2 sided market for a while 🙂

hcgdavis 8:47 am on Friday, February 23, 2018
Tags: CoveredCalls ( 2,202 ), OptionsExpiration ( 794 ), pietrades ( 240 )

Posting early #optionsexpiration so of…

Posting early #optionsexpiration so of course these will all reverse later today.

Should be assigned on #coveredcalls
ERX at 28
FAS at 69
GILD at 72
AAL at 52.5

These were all #pietrades so max profits for the last 3-4 weeks and I will take it. First time the net liq has gone up in a few weeks.

Next week already have the SMH 103 puts and GM 42.5 puts off several rolls (cost basis 39.75) and will add a few more on Monday.

Hope everyone has a good expiration and great weekend! Will load up some new #pietrades on Monday with the cash from the expiration.

hcgdavis 11:22 am on Thursday, February 22, 2018
Tags: pietrade ( 143 )

#pietrade BTO ERX 26 CC…

#pietrade

BTO ERX 26 CC 8 DTE for 25.54. $278 income on 6 contracts in IRA.

Forgot earlier, should be assigned on AAL 52.5 CC tomorrow as well. I had cost basis down to 39.75 or so for decent profit in 3-4 weeks.

hcgdavis 9:46 am on Thursday, February 22, 2018
Tags: pietrades ( 240 )

SVXY

looks like we need 17.75 on the vix now to get out of inversion/backwardization.

Of course it seems like it is taking forever (at least a lot longer than previous spikes) because we all need it to get there.

My accounts took a huge haircut on SVXY and at this point I would be happy just to see it get back to 20. At least that would only be a 50% chop instead of an 80% trimming like it is now. Actually at 50 I would be back to the starting value of the accounts, would just be down the house money I made and lost and I can live with that.

As for the rest of the week, looks like everything will expire ITM on the CC and will let them call out (ERX, FAS, GILD).

On the put side have GM 42.5 and SMH at 103 for next Friday and will add some other #pietrades on Monday.

hcgdavis 10:25 am on Wednesday, February 21, 2018
Tags: pietrade ( 143 )

#pietrade SMH STO the 9…

#pietrade

SMH STO the 9 DTE 103 put at 0.89, 3 contracts so $261 credit.

Trying to collect 900 a week on 3 contracts with 3-4 names. Staying close in the 750-800 range.

hcgdavis 10:11 am on Wednesday, February 21, 2018

Have been tweaking my charts…

Have been tweaking my charts a little to better pick up the reversal points.

The SMI trigger was giving too many signals and too many false signals. Went back to percent r with a setting of 55 based on a netpicks reversal system. Picks up the extremes a little better.

Not quite as good as @fibwizard and still not trading fully directionally but this may help me sell options more accurately at the pivot points.

Any feed back or additional thoughts appreciated.

hcgdavis 8:45 am on Tuesday, February 20, 2018
Tags: pietrade ( 143 )

#pietrade STO FAS 3 DTE…

#pietrade

STO FAS 3 DTE 69 CC for 68.4. Anyone following this trade really work the order the MM being greedy.

3 contracts, $180 max profit for 3 days or 45% annualized ROI without margin.

Lately with these I am finding better to let be called out and then reset each week. If you roll the option lose a little on the bid-ask spread if ITM. If OTM or ATM roll it to bring in more cash.

hcgdavis 1:39 pm on Saturday, February 17, 2018
Tags: Fuzzies ( 40 ), Fuzzy ( 414 ), HashTags, pietrade ( 143 ), pietrades ( 240 )

#pietrades and skew I have…

#pietrades and skew

I have noticed over the last few weeks that a lot of tickers have one sided skew. Just something else for us to take advantage of and increase returns.

For instance, SPY and all the other indexes seem to have put skew meaning the puts are worth more than the calls. Makes sense, a lot of people are hedging and buying protection. So makes more sense to sell puts on these.

However, a lot of individual names skew to the call side. Even AAPL which drags the rest of the market has a little call skew even in the weeklies. Makes more sense to sell CC or set up #fuzzies on these. Most of the leveraged ETFs skew to the upside/call side.

So going forward the #pietrades will be set up taking advantage of this skew. In a limited back test it looks like it could result in an additional 15-25% returns annualized. Not chump change!

So in the future #pietrades will either be CC, naked puts, or covered straddles depending on direction but also where I see an edge in the put/call skew. However, where I may normally sell a put, I may do an ITM CC if it looks like the skew will give an advantage. Also if I have a strong upside directional bias may set the initial trade up as an ATM covered straddle.

If anyone else finds additional ways to suck more premium out of the market on a weekly basis please post.

Taking advantage of this with synthetics aka #fuzzy may work as well.

#hashtags, #pietrade

hcgdavis 8:58 am on Friday, February 16, 2018
Tags: pietrades ( 240 )

#pietrades for next week. Will…

#pietrades for next week.

Will be assigned on AAPL today at 165, cost basis 161. Will re-load next week or when we have a little pull back (everything extended again).

Opened ERX CC at 28 strike, cost basis 27.5 on 5 contracts $260 income.

Closed XBI 85 put at 0.06, sold for 1.15.

Staying pretty close to goal of $900 a week income on 50k account.

Next week expirations wil be GILD at 72 CC, GM put at 42.5, and ERX. Will probably add another early next week. Trying to build up to 5 names, 3 contracts each.

SVXY hit 13, only 77 more points to go after calculating my avg. cost around 90! 🙂

hcgdavis 5:06 pm on Thursday, February 15, 2018
Tags: pietrades ( 240 )

CC vs naked puts

We all know the graphs look the same but after a year of doing both I discovered something that makes a difference. I set up 1 account and have only traded CC in that account, a combination in the others mostly as #pietrades.

Interesting dynamics, both have performed well but the puts/call account did about 57.7% annualized. The CC only looks like it will be close to 88% annualized. That is a significant difference and the difference between doubling an account in 12-13 months vs. 18-24 months.

Very important now that 2 of my big IRA accounts are now little accounts from the SVXY debacle. At 88% could replace all the lost money in 3 years.

So anyway, selling ATM or even slightly ITM CC may improve returns compared to just selling puts. I think mostly because they are OTM and the ATM options have more premium. They also seem to be easier to roll down and when you roll them up you get appreciation plus extra income.

hcgdavis 12:25 pm on Wednesday, February 14, 2018
Tags: Fuzzies ( 40 ), Fuzzy ( 414 )

SVXY additional thoughts

So without being back in contango SVXY is now up 1.2% on the day. I have been looking at percentages and found some info that the reason it dropped so hard was because of the difference in the short vs. long term VIX nunbers. Had long term vol. been higher, the drop would not have been as severe. It appears that you have to watch the potential spread and the wider it gets, the more damage a volatility spike will cause.

Since vol had been so low, the difference caused by the spike was more severe.

Anyway, I certainly won’t trade it unhedged again but I think it is a useful tool for income and trading.

Also, at these suppressed levels the option premium is not there to justify selling cc yet, at least for me. We start getting some decent premiums I will start selling weeklies against it but need at least 0.40 a few strikes OTM before I would call that decent. Had you sold the ATM you would already be rolling.

Once back in contango (vix below 17 should trigger), the drag from rolling the options should start to have a good benefit. Historically about 1-2% every 2 weeks in looking at the contango history.

Do we zoom back to 140, probably not. But if we can stay in contango for a while, we could be sitting at the 30-40 level again in 6 months. That would be enough of a recovery for me to close everything out and move the earned back cash to other vehicles.

I think the best way to trade this would be #fuzzies after a vol spike. Controlled risk, no cap on upside if you do not sell calls against it.

I know a lot of us were burned on this and I can feel your pain, 2 IRA accounts almost completely wiped out, but I think if we are patient, hedge gradually on the way up (buy puts in case it goes to zero), we can get back most of what we lost in about 6-12 months. Of course any additional vol. spikes will slow that down. Be patient but hedge.

Just thinking out lot. Anyone else have anything to add please comment……….

#fuzzy

hcgdavis 12:42 pm on Tuesday, February 13, 2018
Tags: pietrade ( 143 )

#pietrade STO AAL 10 DTE…

#pietrade

STO AAL 10 DTE 52 Calls at 0.54 against 200 shares of stock. Cost basis around 49.75.

hcgdavis 8:01 am on Tuesday, February 13, 2018
Tags: Fuzzy ( 414 ), pietrades ( 240 ), VXXGame ( 769 )

#pietrades Rolled GM 42.5 put…

#pietrades

Rolled GM 42.5 put that expires this week out 2 weeks for 0.43 credit. CB now under 40.

XBI STO 10 DTE 85 put for 0.77. Went through fast at mid point, may be able to get more if you work the order.

SVXY decision. With the futures expiring today, my hope is that as they expire we may see a pop. However I do not expect steady gains until we are no longer backwards which may take a few weeks and probably not until the VIX is under 18. Anyway, I am holding the stock until then. Once we have some gains I will make sure it is hedged in the future, probably by setting up a #fuzzy ratio but do not want to spend extra money on this trade until it recovers even a little.

The VXX trades below look smart. I would do it if had capital left. The hedge fund book I am reading, Mark Sebastain does that every 2 weeks. Buys puts on VXX or a debit spread and rolls it to the next 2 weeks when there is a 50% profit. May be a smarter way to play #vxxgame in the future. Losses are capped but probably steady gains. The flip slide would be selling ATM call credit spreads.

I will NEVER be short VIX, SVXY unhedged in the future, lesson learned the hard way again. I think a hammer the head would have been easier.

Thanks everyone for the help/thoughts on VXX/SVXY over the last few weeks. I think going forward we are all much smarter about how to use these instruments and more importantly how not to use them. But collectively I think we will all make back most of the losses within 1-5 years (that seems like a long time at the moment) but will go by faster than any of us can imagine!

hcgdavis 10:51 am on Monday, February 12, 2018
Tags: pietrade ( 143 )

#pietrade 2 additional tickers to…

#pietrade

2 additional tickers to add, MRK and PFE. Stable blue chips but with the vol spike they qualify for the 1% per week return on puts/calls 1-2 strikes OTM.

I am sure there are a lot more at the moment but don’t have time to trade until Thurs. unless I figure out what I want to do with all my SVXY shares now. I caught up on the conversations below, maybe better to just take the loss and move on as opposed to hold and potentially see it go to zero/0.

hcgdavis 7:50 am on Monday, February 12, 2018

Apparently there was more excitement…

Apparently there was more excitement in the market than skiing this weekend. Driving through NYC heard the dow was down another 1000 points, WTF? So at my next rest stop I had time to check SVXY to make sure it was still alive.

On a 9 hour drive to Maine had plenty of time to think about what the hell to do now.

So the first thing is I need to pay attention to rule #1, first do not lose any money and rule #2, do not forget rule #1.

All of my big losses have been on derivatives or leverage on derivatives. SVXY now and futures options. So no more leverage on leverage or as @jeffcp66 said a derivative of a derivative of a derivative.

Anything I have been assigned on a loss have always been able to work it back to even or a profit.

So rule #3 for me now is only trade hard assets, something you can be assigned when the crap hits the fan. From there can work it back with options, usually quicker than you think.

Rule #4, weekly options give more options for adjustment, so my ticker must have weeklies.

Rule # 5, stop trying for home runs, playing money ball I can double an account every 2 years conservatively.

#6, if anyone here has a dog they can train to bite me when I violate any of these rules, I will come pick it up.

Right now looks like the algos will be driving volatility for a while until we establish a new range.

Trade wisely!

hcgdavis 10:57 am on Wednesday, February 7, 2018

Still backward but getting close,…

Still backward but getting close, maybe another week or 2.

www.vixcentral.com

hcgdavis 7:08 am on Wednesday, February 7, 2018
Tags: pietrade ( 143 ), pietrades ( 240 )

#pietrades AAPL, rolled this week…

#pietrades

AAPL, rolled this week 165 CC to next week for 1 credit. Market makers still be greedy on the spreads. cost basis now 161.

GM rolled this week 42.5 put t next week for 0.25 credit. Cost basis now 40 and pennies, I forgot a calculation last week and too lazy to do it now.

SVXY is going to become a #pietrade as soon as I am assigned some shares. Weeklies trying to get 1 per week but far enough OTM that will not have to cover and will wait until we are back in contango. See discussion below.

Good luck everyone, I am done for the week, going skiing in Maine tomorrow morning.
Hopefully start the SVXY recovery Monday morning!!

hcgdavis 12:14 pm on Tuesday, February 6, 2018

SVXY school

Obviously a bunch of us just got schooled in VXX products, especially SVXY.

Some things I have learned.
1. it can really go to zero and be closed down. Even if cash secured you can still be wiped out so spreads probably make more sense.

2. Most of the time it is going to infinity but can also race to zero. In looking at the news now that I have time, they had a huge margin liquidation (probably a hedge fund having to close) and that is why we closed at 70.81 but gapped down as low as 10. Had they not had to do that we probably would have opened around 70.

3. as soon as we see backwardization probably worth closing anything on the put side. I could have been out yesterday with only minor losses. Now looking at 80% haircut once assigned.

4. The option liquidity dries up and bid-ask spreads become ridiculous with a volatility spike

5. I can work with a big loss, cannot do anything with bankruptcy/liquidation. Things that appear liquid may not be all the time.

6. Somedays better to be lucky than good. Glad they are closing XIV and not SVXY. Hope no one here was in XIV but probably not since must of us are option traders.

7. You can lose money a lot faster than you can make it, even if you know what your are doing.

Now going forward.
1. Once liquidity returns will be selling OTM delta 16 or lower calls to try to reel back in some cash.

2. Once I have recovered enough of my original investment will collar that thing so no wipe out type losses.

3. Stay small, have a lot of different eggs in the basket(s) so no big loss. Have to admit I was getting over confident with the VXX trades. My mostly stock accounts have already recovered.

4. Fortunately not all my expirations are the same day so I can stagger some of the losses and may get to roll some once the options are trading well again.

Hope everyone finds a way out profitably, it will take a while but once back to contango we should be back in the right direction at least.

I will only play these trades now with “house money”.

hcgdavis 9:31 am on Tuesday, February 6, 2018

The news just said (barrons)…

The news just said (barrons) that XIV is being closed but they are keeping SVXY operating.

hcgdavis 1:12 pm on Monday, February 5, 2018

Just caught the close, I…

Just caught the close, I know some people have not done well with the drop, but hang in there. This is where the big money is made when everyone else is running for the exits. The optionsbistro group will be there to sell them overpriced insurance policies (options)!

I will be setting up some SVXY/UVXY synthetics once I see a little stabilization.

Will also be rolling options by Wed, out of town at the end of the week.

Good luck!

hcgdavis 2:42 pm on Friday, February 2, 2018
Tags: Earnings ( 3,108 ), Fuzzy ( 414 ), pietrades ( 240 ), SyntheticStock ( 356 )

Just a quick note, I…

Just a quick note, I had some expirations but managed to roll all of them for more cash so they are all next week now. The last move like this in Aug. 2015 crushed (and I mean wiped out) a major trading account. Today my main trading account only down about $500, the hedges worked well.

See you can teach old dogs new tricks and thanks to everyone here for showing me some additional tactics that help on days like today.

Everyone have a good weekend, looking forward to Sunday night opening. Either way have some trades lined up and kept some cash on the side lines so I can take advantage of the blood in the street 🙂

Technically what only a 2-3% drop? Technically 2.31% on SPX/ES.

Cue the chicken, I am glad I closed the /ES strangle this morning. Not ITM but the margin would have used up my cash cushion for next week.

#earnings, #fuzzy, #pietrades, #syntheticstock

hcgdavis 8:35 am on Friday, February 2, 2018
Tags: pietrades ( 240 )

#pietrades rolls AAPL CC at…

#pietrades rolls

AAPL CC at 165 rolled out to next week for 1.46 credit. CB now 162. That was quite a swing, 10 points up and down in 12 hours. Probably roll another week or so to capture the dividend.

GM rolled 42.5 put out to next week for 0.54 credit. CB now 41.4

I am stalking VXX/SVXY fuzzies as soon as I see a reversal that looks like it will hold. Not going to cap them. Play SVXY synthetic long, VXX synthetic short with disaster protection 5-10 points out.

hcgdavis 2:38 am on Friday, February 2, 2018
Tags: SPYcraft ( 95 )

#spycraft Closed the 42 DTE…

#spycraft

Closed the 42 DTE /ES 2575/2955 strangle. It will probably be fine in the long run but I do not have time to watch the market the next 10 days.

The put was bought for 8.25, sold for 7.25 and the call was both for 3.15. 2 contracts so $100 loss plus $2.5 commissions.

hcgdavis 8:20 am on Thursday, February 1, 2018
Tags: pietrades ( 240 ), SPYcraft ( 95 )

#pietrades for next week. Just…

#pietrades for next week.

Just sitting on my hands to let theta do its work, currently 748 in my favor. But here is management for anyone following.

AAPL the time value in the 165 CC should crush after today. As long as I can roll the CC to next week for 0.5 credit or roll up a strike for even, will do either of those. If not will let it assign over the weekend for full $471 profit on 3 lots. If it drops will sell a call next week.

GM is currently 0.25 ITM but still showing a slight profit. Will let it assign then sell CC next week.

GILD is still deep ITM but with the pullback do the same as AAPL. If I can roll it in 2-3 weeks for a 0.5 or higher credit or move it up will roll. If not will let it call out, it still has 21 DTE because of recovery trades.

SVXY 125 puts expire next week, currently ITM and will probably let them assign and flip to CC the following week.

I am fairly flat at the moment. Going snowkiting (skiing with a kiteboard kite) in Maine next week to a place there is no internet or even cable TV so did not want anything on I had to babysit. I can take assignment on everything I have on or let it expire for max profits. May even tackle Mt Washington, have not been up there in 17 years!

The only trade I may close or tweak before leaving is the #spycraft /ES strangle which is already showing a profit but will let some more value decay over the weekend. I can trade until Wed.

hcgdavis 5:37 pm on Wednesday, January 31, 2018
Tags: SPYcraft ( 95 )

#spycraft Sold the 44 DTE…

#spycraft

Sold the 44 DTE /ES 2955 call as the market was pulling back for 3.55. That gives strangle at 2575p and 2955 c, 2 contracts. Of course after hours now the market is up again. For those that wanted the SMI settings I will post later, crazy at work and the code is on an old computer and have to dig it out.

hcgdavis 5:48 pm on Tuesday, January 30, 2018
Tags: SPYcraft ( 95 )

#spycraft /ES trades 23/5 and…

#spycraft

/ES trades 23/5 and did not have time to trade today, so I am looking at legging into a short strangle. Nice boost to premiums with the still small vix spike. Will probably leg in, tech indicators are about to give long signal. Went back to SMI, percent r still too whippy even with the longer settings. See below and if you want the smi settings I can post. To be honest, I personally like /es better than spy or spx. Better margin, more trading hours, easier to hedge with a smaller $ amount, good liquidity, and better margin treatment.

So signal just printed while I am writing this. Selling the 45 DTE 2575 put at 7.5 (went through). I will wait on the call side in case this is another BTFD. This is a delta 8 option.

hcgdavis 7:57 pm on Sunday, January 28, 2018
Tags: SPYcraft ( 95 )

#spycraft BTC /ES 31 DTE…

#spycraft

BTC /ES 31 DTE 2615 put for 2.20. Sold for 5.25 but this was part of a strangle that I had to close the call side on for a loss. Made $5 on it total but still have the 31 DTE 2675 put. Will let it decay another week and close it.

Looking at opening another 2 contracts 47 DTE depending on how the week starts. We get even a little pull back will open strangle. If not, just sell puts, the calls keep getting run over.

hcgdavis 8:53 am on Friday, January 26, 2018
Tags: Fuzzy ( 414 )

GILD

1 more, closed out the GILD put #fuzzy for $951 loss but not too bad since it is in booster phase at the moment and had set up the #fuzzy as a recovery in the first place. The original loss at the time was $4838 so to I will take the 951 loss and move on. The CC will offset that when it closes in 4 weeks.

hcgdavis 8:40 am on Friday, January 26, 2018
Tags: Fuzzy ( 414 ), pietrades ( 240 ), SPYcraft ( 95 )

Bunch o trades, good thing…

Bunch o trades, good thing I had the day out of the office.

I believe everyone here has heard John Carter talk about the “plane trade”. Whenever he is on a plane and cannot trade the market goes haywire. I have the ski and kiteboard trade that is similar but magically did not happen yesterday. The Theta crush was nice, decay was $1400 yesterday and crushed to $40 this morning. So anyway I took it and went flat and used the $ to set up some #pietrades for next week.

First a few observations now that I am into my taxes.
1. It seems my best trades were #pietrades and anything I had basically sold naked or converted to a CC after assignment.
2. #fuzzy trades work well for recovery. Exhibit SWKS dropped 17 points on me after earnings. I rolled as much as I could then converted to a put based #fuzzy when it kept dropping. Managed to close out for $1635 profit today, it could have been really ugly and took about 13 weeks for it to pay off.
3. Getting out of #fuzzy trades is not as profitable as a CC or being assigned the put. The bid-ask on the longer dated options cuts into the profit. When the put assigns or the CC assigns you have basically sucked every penny of time value out of that option. However on a percentage basis synthetics are much better ROC.
4. Finding anything not way extended at the moment is really hard but I found a few for #pietrades
5. Laddering #pietrades usually does not work because you end up getting assigned on all of them at the same time. Better to keep them weekly. There is always something out there with decent premiums and a not too bad looking chart.

SVXY rolled Feb 2 105 puts to feb 110 for 2.92 credits. Sold for 3.42 so if assigned the cost basis will be 104
Did the same for Feb 16 105 to 110 for 2.05 credit. sold for 3.42.

SWKS closed out the final put #fuzzy at 100/102 for 13.10 credit. Made $1635 on the trade after rolling for 13 weeks. Good to be out with earnings next week.

WDC Closed out the put/call #fuzzy 82.5 strikes for 13.32 and 13.15 credits. Total profit $2600 but not great, I was up over 15k on that trade at one point. From now on will take the money early if the profit is there!!!!!!!!!

#pietrades
1. AAPL new CC for next week 165 strike for 163.43 runs through earnings but hope it will close on Friday 2/2 max profit $471 on 3 contracts if it closes.

2. GM 2/2 42.5 put for 0.53, 3 contracts for $156 after commisions

3. GILD open for 28 DTE 72 call is way ITM so will let it expire in a few weeks.

So basically made $627 for this week in income on 2 new trades using a 50k account with some margin. Goal is 900 a week so fairly close. Once the GILD trade closes I think it is possible.

Hope everyone had a good week. Only trade I have until next Friday is the #spycraft /ES puts once they decay a little more.

Cheers 🙂

hcgdavis 11:12 am on Wednesday, January 24, 2018
Tags: Fuzzy ( 414 ), pietrades ( 240 ), SPYcraft ( 95 )

SWKS closed half a #fuzzy…

SWKS closed half a #fuzzy the 100 put 2020 leap and the 104 9 DTE for 12.10 credit.

Starting clean out to get back to cash so I can restart #pietrades and #spycraft trades.

Will take me 2,9, 16, 23, and 30 days to have everything flat or until the time value is out of the short options, hopefully before then 🙂

hcgdavis 6:31 am on Wednesday, January 24, 2018
Tags: Fuzzy ( 414 ), pietrades ( 240 ), SPYcraft ( 95 )

#spycraft Since the market only…

#spycraft

Since the market only goes up now, sold a 35 DTE 2675 put for 4.65. No short the 2675 and 2615 puts for 35 DTE after closing the call side of the strangle yesterday. Easier to defend in 1 direction as well.

#fuzzy, #pietrades

hcgdavis 12:42 pm on Tuesday, January 23, 2018
Tags: SPYcraft ( 95 )

#spycraft BTC the 36DTE 2910…

#spycraft

BTC the 36DTE 2910 call on the strangle for 7. Sold for 2 so total loss on that half is $102. Total on the strangle was $400 so can still make close to 300 on the put side.

This stupid market just won’t stop, annoying really 😦

I would have left it, but have you ever had one of those days where everything on your screen is red!? I just need the SPX to not go up anymore, GILD to go back down, SWKS to go up, and WDC to pull back a little. Every stinking one of them is going the wrong way, so I really did this to keep from getting a margin call. I can recover the other 3 now.

The other issue is my theta is high but because everything is in the wrong direction it is not making a difference, at least I flattened the deltas buying back the /es call.

One of the best TT episodes was titled “I am not greedy, I just want it faster”. I think that was when they discovered 45 DTE is best decay rate for OTM options. That’s how I feel this week, huge decay but not doing me any good because they are all ITM now.

I think time to close everything out at break even or a slight profit and reload 🙂

hcgdavis 10:15 am on Monday, January 22, 2018
Tags: pietrades ( 240 )

#pietrades Others to add, SSO…

#pietrades

Others to add, SSO and UPRO

If and when we ever get a full on reversal, we can then switch to selling puts on the inverse ETFs such as DOG, SQQQ, SDS. I looked at some of the others but these seemed to have the best premiums, weeklies, and tighter bid-ask spreads. I am sure there are others I may have missed.

hcgdavis 5:20 pm on Sunday, January 21, 2018
Tags: SPYcraft ( 95 )

#spycraft No panic at the…

#spycraft

No panic at the futures open tonight. Will hold on doing anything with the /ES strangle. However, once the government is open for business market will probably keep chugging higher so me may close the call side soon.

hcgdavis 8:01 am on Sunday, January 21, 2018
Tags: pietrade ( 143 ), pietrades ( 240 )

#pietrades A few names to…

#pietrades

A few names to add
GLW (corning) for smaller accounts
AXP for medium accounts
QQQ for medium to large accounts
IWM for medium accounts
FSLR for medium accounts
TNA and FAS for medium
ERX for small to medium
SMH for medium
HD for large accounts
TAP for medium (beer money) 🙂
DIS for medium

Anyone else who finds others please post. 3 simple rules, stays in a range, good weekly premiums, and should have weekly options (not a requirement but makes management easier).

#pietrade

hcgdavis 3:14 pm on Saturday, January 20, 2018
Tags: Fuzzy ( 414 ), SPYcraft ( 95 )

Too busy to post trades…

Too busy to post trades yesterday, not much just some clean up.

SWKS rolled 102 and 104 puts for 1 DTE and 7 DTE for 0.94 and 0.60 credits. Sold for 4.15 and 5.25 after rolls. I was ready to close out the #fuzzy on this at max profit, then it dropped 3 points yesterday. So will roll a few more times until I can close it at a profit. Had recovered the 17 point drop, now need 3 more for some profit.

Lost my chicken scratch trade sheet but I also rolled some SVXY puts around 100 out 28 DTE for 1.35 credits.

#spycraft may need to close the /ES strangle 2615/2910 39 DTE depending on what the futures does at the open Sunday night. @fuzzballl cue the chicken, maybe.

If we are down 25-50 points will actually be perfect. We start moving more than that will probably just close. Be ready for anyone else in this trade. We have a lot of range to play with, but I don’t have a lot of margin left so for me will be a necessity to close if it starts going negative. If this were next week, no problem, have some big trades closing but my margin cushion is thin this week.

hcgdavis 6:11 pm on Wednesday, January 17, 2018
Tags: pietrades ( 240 )

#pietrades Here are some specifics…

#pietrades

Here are some specifics for what I think makes a good PIE stock for weekly trading.
1. perceived volatility but actually stays in a range. The higher the value the wider the range can be and still work.
2. ATM or OTM premiums of $1 or better. The more you get up front the less you have to recover later.
3. Weekly options.
4. Good volume (BX fits the bill except for the bid-ask spreads), I got hammered getting out of a trade last week. $300 profit was trimmed to 120 so it is off my list.
5. Steady pivot points or long term support/resistance. If it moves out of the ranges establishes a new range quickly.

So here is a list I am looking at broken down by size of account.
Small account AAL, GM, DAL, HAL, LNG, BAC (limited), ERX (triple), EXAS (new addition, thanks), AMAT, XOP, MU, AMD, NKE (not the best but can work), UNG since the split, INTC, TMUS, LUV

Medium account can move to WDC, SWKS, GILD, XBI, MA, V, WMT (a little bit), MON, BIB (no weeklies), UAL, RCL, WYNN, MAR, UTX, AMGN, UPS, CAT, NSC, ANDV (previously TSO and my biggest income producer, not as good since the merger), UDOW, IBB, VLO, UPRO, TQQQ, CELG, JPM, FB, AAPL, EXPE, UPS, TLT @fuzzballl suggestion

For those with really big accounts GS, BA, AAPL with some volume, SPY, LRCX, FDX, COST

Keep in mind a lot of these just went booster stage so I would wait until they establish a new range.
Also if I am assigned puts at a pivot point and have some buying power left I will often go CC with straddle puts at the assignment price. Juices returns a little more but also adds risk.

Please post any other tickers that look like they would work.

hcgdavis 6:58 am on Wednesday, January 17, 2018
Tags: Fuzzy ( 414 )

GILD rolled 16 DTE 76…

GILD rolled 16 DTE 76 put out a week and up to 77.5 for 0.86 credit. Sold for 4.15 off a bunch of rolls and has now been converted to a #fuzzy. It was down to 0.25 and going skiing tomorrow so will not be trading.

hcgdavis 7:25 pm on Tuesday, January 16, 2018
Tags: Fuzzies ( 40 ), PerpetualRollingStrangles ( 116 ), pietrades ( 240 ), SPYcraft ( 95 )

I ran a little experiment…

I ran a little experiment for about 8 months last year, did not post because I was not sure how it was going to work out but here is another easy to manage, high return tactic. I got this from options income blueprint. I do not subscribe to this particular branch of it, but easy to understand and I reverse engineered it using different names. They were using AAPL, LNG, and GILD.

It is called perpetual income engine. Very simple, take about 2-5 stocks that tend to stay in a range with good option premium. Start by selling a 1 week put either ATM or 1 strike below. It is either assigned or is not. If it is assigned immediately take delivery of the stock and then on Monday sell the ATM or 1 strike out of the money covered call. If not assigned, then sell the next week put. It is very easy to implement and does not take much time.

I used 3 tickers last year, TSO which has since become ANDV, XBI, and WDC. As I am starting to review my trades from last year for taxes, I see how effective it was. It takes a while to sort everything out but the results were impressive given the simplicity.

8 months, 3 contracts each name so only tying up about 50,000 of capital earned a 57.7% return. Annualized 86.55% return. Pretty impressive given the simplicity. Obviously I will keep this going and will start posting my trades now. They will be known as #pietrades.

I do not have all the numbers yet, but the last year appears that naked puts and strangle selling was the most effective, followed by PIE trades, and a very close third goes to #fuzzies based on return on capital. However the #fuzzies worked the best for recovery of positions that went really bad. Not surprisingly given the one-sided market credit spreads did not do as well last year.

I am always looking for the most efficient way to use capital, make money, and give me more free time. Based on these results I will probably focus on those 3 strategies most of this year and will add in the occasional #spycraft when the volatility is decent.

#perpetualrollingstrangles

hcgdavis 9:22 am on Tuesday, January 16, 2018
Tags: SPYcraft ( 95 )

#spycraft alternative. While waiting on…

#spycraft alternative. While waiting on SPY to show better prices, the /ES is showing better prices with the slight increase in VIX.

1 contract (sticking to the initial guideline) STO 1 /ES 43 DTE strangle at 2615 put and 2910 call for 8.0 credit.

Plan is to take it off at 25-50% profit hopefully in 1-3 weeks.

hcgdavis 8:34 am on Monday, January 15, 2018

At least with the market…

At least with the market closed today we get one day where it does not go straight up, but futures are looking that way.

hcgdavis 8:28 am on Friday, January 12, 2018
Tags: Fuzzy ( 414 ), VXXGame ( 769 )

Rainy day here, had planned…

Rainy day here, had planned to go skiing as I have the day off but no fun when 65 degrees and raining, so stayed home and traded.

#vxxgame SVXY closes, rolls and take a few for the team. By going directional now the market should reverse which will help some of my other trades 🙂

SVXY BTC Jan 19 50 put for 0.04 and 55 put for 0.05. Sold at 1.27, 1.37, 1.14
BTC Jan 19 80 put for 0.11 sold for 1.14
STO SVXY Feb 9 125 puts for 3.90. I have feeling these will get tagged, that’s may hope anyway, a reverse hedge for some of my other positions. If this one does not do well will still make $ on the others then.

TQQQ rolled Jan 26 120 put to Feb 16 140 puts for 1.90 credit. Sold for 1.25

BX Closed out #fuzzy Jan 2019 25 Jan 18 33 diagonal and made a whopping 108 profit, it was 318 but the bid-ask on the options on this one do not trade well. BX is not a good trading name-just FYI. However, had I done a CC it would have closed next week at full profit, see @smasty160 fuzzy discussion below. There are a few names where a CC makes more sense than a synthetic, this was one of them.

USO, sold 2 Jan 19 puts at 11 for 0.54. This is a tiny account and that is all I could figure out to do with the BP left and still make a decent premium.

Hope everyone finishes out the week strong!

Chris

hcgdavis 5:51 pm on Thursday, January 11, 2018
Tags: VXX ( 9 ), VXXGame ( 769 )

Fishback has their simple VIX…

Fishback has their simple VIX profits available again for $1495. Anyone interested? I am not advertising for them but I have not been able to fully reverse engineer their trigger for switching from VXX to XIV.

If some others are interested we could split price and all learn the trigger for the #vxxgame trades.

#vxx