WDC has been in a new range. This is still an earnings trade I have been adjusting since last earnings drop. I am up overall on the trade, but the hedging/theta was not keeping up with the drop so went old school calendar adjustment. Rolled the long 743 DTE 90 straddle down to 82.5 for overall credit of 1.5.

Then rolled the short straddle 22 DTE 90 down to 82.5. This is a roll into earnings so good premium. Debit of 4.24 but still against my accumulated rolls of 18.27 credits. Just keeping the cash machine alive for a little longer. Here is the new profit graph as long as we stay in the new trading range of 77-85 or so. Still have 106 weeks to sell against it and no margin requirements now, that is the main reason I tweaked it and to get extra theta burn.

Saw a web site that looks at what hedge funds are buying/selling. We maybe able to pick up some ideas here.

www.whalewisdom.com

Rolled 77.5 put 22 DTE to 50 DTE for 0.67 credit. Sold for 5.40 as previous roll, officially break even now. Next roll should bring some cash back in.

Rolled 11 DTE calls (covered) out to 28 DTE for 0.35 credit. Just holding through dividend then will let them be called out. Still have the LEAPs puts I will keep writing puts against. Definite skew to put side on this one now so will probably work out without the calls to write straddles on.

Rolled a bunch of small SVXY positions, 100 puts this week to 15 DTE for credits of 1.85, 1.89, 1.88. Sold for 4.2, 4.05, 4.15 on last vol bump.

Rolled TQQQ 120 puts from tomorrow to 15 DTE for 1.49 credit. Sold for 1.35.

Even on a big down week with WDC, SWKS and still adjusting GILD made $3482, just have to love theta decay! Down on the computer screen but net worth still climbs.

1 week DTE for you other Stars Wars fans out there! And there should be skiing in the mid atlantic next week, finally cold enough 🙂

Nothing else for me until next Thurs. Lots of expirations next week. Hope everyone has a good close to the week and a fun weekend!

BTC the 12/22 98 puts at 0.77 sold for 1.05
BTC the 12/29 97 outs at 0.71 sold for 1.03

Just needed to free up some margin in this account

Did not have time to post earlier.

BTC the 71.5/72 straddle strangle and STO 23 DTE for 1.21 credit. Originally sold for 2.12 so total credit now 3.33 on stock assigned at 79 (CB 78.06) so now down to 74.73 in 2 weeks. One more roll should be break even but I also opened some 77.5 LEAPs so will be rolling those puts next week. Once I break even may keep going with the straddles as an experiment. LEAPS expire Jan 2019 and I can hold the stock for the dividends and sell call side and the puts against the leaps.

Looks like by selling an ATM or close to the money straddle can bring in 2-4 credit each week on most stocks going out 1-4 weeks and may result in quicker profitability than just converting to CC. Will see over time how it works.

The LEAPS only cost 12.26 so should be able to cover those in about 12 weeks.

What do you guys think about tweaking LEAPs to a modified covered straddle? In other words using WDC as example at current prices, buy at leaps call either ITM or close to money, then sell weekly/monthly straddles against it. You could also buy an OTM put leap as disaster insurance. Similar to our synthetic long/shorts but the advantage by selling a straddle or strangle each week is that you bring in a lot more premium, double in most cases but on individual names I don’t like selling calls naked. Burned on HNZ a few years ago on a strangle.

For WDC example BTO 85 2020 call. STO 12/8 87 call. STO 12/8 85 put. Could put it on for about 15.62 at current prices. On a 10 lot break evens of 84.2 and 93.61 with 11 day profit of 2554 max.

Adding a 75 2020 put would add 12.30 or so and narrow the break evens and lower max profit to 1321 but limits downside risk to 10 points. With 781 DTE that would give potentially 111 weeks to sell straddles. Figure 25% would need adjustment but still a killer return. Figure $3-4 premium each week with ATM options could cover the entire trade in about 3-5 weeks if, and a big if everything stays in a tight range.

The reason I am thinking about this is I accidentally did this with GILD and selling straddles/strangles has really improved my recovery on a trade gone wrong. Going out 2-4 weeks I can sell an ATM straddle for about 4. I was assigned at 79, cost basis was 78.1 and change. 2 weeks of selling straddles I am almost at break even with GILD at 71.55 and have some long LEAPS puts at 77.5. So effectively covered on both sides and can sell the crap out of weekly options to both sides without having to tap into too much margin.

Thoughts, comments? Anyone else doing this or tried it?

BTC 38 DTE /ES strangle for 5.25. Sold for 8.35 9 days ago.

Will sell new one later in the week when the next weekly cycle comes out. My experiment with this is to have trades open 7-10 days, take 25-40% profits and recycle weekly instead of holding for 3 weeks for 50% gains. By recycling capital faster should have better returns and less risk. I was watching old TT re-runs and a few years ago there was a segment on turning capital over quicker that may be more efficient than holding longer for incremental higher gains.

Added a straddle/strangle to GILD to make break even quicker now that we have found bottom.

STO 21 DTE 72 put at 0.8. Cost basis now 76.26 but break even only 74.37 for the entire series of positions. Pairs with the 21 DTE CC at 76.

have a good weekend!

2 days down in a row. Is that a record?!

Rolled 11/10 78 puts to 12/3 for 0.48 credit. I had no problem taking shares this friday but easier to manage margin if I don’t.

Also Michael Shulman of options income blueprint reminded me it is quicker to break even by converting to covered calls, but .40 a week for a year is $2080 and my own rule is if I can still take a credit close to 0.5 better to keep rolling the puts. Much below better to take shares and convert to CC.

Received a random call from my account rep at TD Ameritrade/TOS this afternoon as my previous rep left and she wanted to introduce herself. After talking for a few minutes realized she mainly wanted to know where all my trade ideas were coming from (Options Bistro) and to ask how I had 47.7% returns on the margin account in 6 months. Also did 35.6% on the IRAs in 6 months and a lot of that is from the ideas I get from the rest of you.

Thanks for the trade ideas and helping me tweak trade tactics to get more out of them.

Good to be here and hope I give some of you some ideas!

Let’s keep the ideas rolling but I still wish for some volatility without anyone getting burned.

Cheers

Last trade for the week, have a good weekend everybody!

Rolled WDC 86.5 puts this week to next week 85 for 0.65 credit.
Rolled WDC this week 85 CCs to next week for 1.89
Rolled WDC this week 84 ccs to 85 for 1.31 and 1.32 credits
STO SVXY Jan 2019 50 put at 1.92

Nothing else expiring until next week. Finally at least not an up day but we still have 3 hours to the close so I am sure we will have another record after the pull back this morning.

STO for next week of ladders
GILD 11/10 78 put at 1.04
EOG 11/10 92 put at 1.01

Rolled WDC 86 call tomorrow out 2 weeks for 2.23 credit. There was still .40 left in it but looking at mys schedule in the office not certain I would have time to trade at lunch. Better to do it early than not at all.
STO WDC 10/27 82 put at 1.18

From my WDC rolls now my cost basis is under 80 and finally showing big profits on the rolls. New trading range looks like 82-87 so as long as we stay there I will keep rolling the calls to take in more cash each week. Also pulled in the dividend of 0.50 last week. Virtual ATM last 12 weeks. The CC generates more cash than the puts but lower ROI.

Unless the market moves a lot tomorrow I am good until next week. Hope everyone has a good expiration week and trade smart!

Cheers, Chris