#SPXcampaign STO $SPX Feb 18th 2010/2035 call spreads for 1.25. Will wait to sell more if we rally a lot higher today.
Author Archives: Jeff
Bulls on Parade
According to TC2000 charting, we just hit the highest TICK reading since May 8th.
Ok, we hit 1820. Now…
Ok, we hit 1820. Now what? We might rally for a day or few, but if we come back down to test today’s lows again, be ready for 1700’s.
TZA roll
#ContangoETFs #Rolling Rolled short calls into a strangle
BTC TZA Feb 18th 70 calls for 7.95
STO TZA March 18th 80 calls for 7.15
STO TZA March 18th 50 puts for 1.00
Stat break
Lowest day on SPX since February 2014 (we have exceeded Oct 2014 correction lows)
VIX hit 150% above Oct 28th low, and at a new high, beating Friday’s high (highest since 9/1/15)
Lowest day ever on USO, which started in 2006
SVXY lowest level since Dec 2012 (when I started #VXXGame!)
In sharp contrast, UVXY was this high only 3 months ago
TWTR bottom?
TWTR has been slaughtered since Jan 1, and hit new lows today. But after being down 9% yesterday, it has bounced today and is down only 2.4% while markets keep dropping. It’s valuation alone must becoming attractive. Is it a bottom?
put spread
#SPXcampaign Sold to open $SPX Feb 5th 1615/1590 put spreads for 1.25.
As we hit 3.5% down on the day, that will be the final spread I try. We will need some strong bounce days in the mix for these put spreads to survive. Today’s drop is the biggest of the year and VIX just hit its highest level since Sept 1st.
calls closed
#SPXcampaign Bought to close $SPX Jan 29th 2000/2025 call spreads for .20. Sold last Thursday for 1.35.
TZA rolling
#EarlyAssignment #Rolling #ContangoETFs
Although I have been rolling my $TZA position that started as a Jan 15th 50 calls, I did not roll my Jan 22nd 50 calls. One was assigned last night, so today rolled the whole position:
Assigned (1) TZA Jan 22nd 50 call
STC (100) TZA stock for 69.75
BTC (1) TZA Jan 22nd 50 call for 19.90
STO (2) TZA March 50 calls for 20.60
UVXY adds
#VXXGame Keeping these close to expiration, as not sure how high this can get in coming weeks.
Adding to positions:
STO UVXY Jan 22nd 70 call for 1.00
STO UVXY Jan 22nd 75 calls for .60
STO UVXY Jan 22nd 80 calls for .36
STO UVXY Jan 29th 95 calls for 1.00
NFLX closed
#Earnings BTC $NFLX Jan 22nd 85 puts for .05. Sold yesterday for .72 (avg price)
SPX puts added
#SPXcampaign Sold to Open $SPX Jan 22nd 1750/1725 put spreads for 1.30. These are added to the ones I sold last week, so this is now a double position. Expires this Friday, unless we drop 100 points more.
UVXY strikes added up to 95 on weeklys
STO $UVXY Jan 29th 95 calls for 1.00
Contango ETF webinar – TODAY (Wednesday)
Learn about the ETFs that OptionsBistro traders love, like UVXY, NUGT, and KOLD! The products that, by design, are dragged downward over time, giving traders an edge.
If you have not previously replied, this is your chance… there are limited spaces remaining, so the first people to reply to this post will get the remaining slots. If you miss out, look for a recording that will be posted on this site for a limited time starting Thursday.
Thanks!
Put spread
#SPXcampaign STO $SPX Feb 18th 1625/1600 put spreads for 1.25.
Calls closed
#SPXcampaign BTC $SPX Feb 12th 2060/2085 call spreads for .20. Sold for 1.25 on Jan 11.
Volatility
STC $VIX Jan 19th 19 call for 7.00. Bought for 2.87 in Dec. One more left I will sell by day’s end.
STO $UVXY Jan 22nd 70 calls for .65
STO $UVXY Jan 22nd 75 calls for .45
ETF circus
STO $KOLD August 265 call for 14.00
STO $DUST March 40 calls for 1.25
BTC $BOIL March 50 call for .05. Sold for 1.05 on Nov 5th
March strikes were added for KOLD, but highest strike is only 165, which is currently 5 points ITM.
NFLX earnings
#Earnings STO $NFLX Jan 22nd 85 puts for .75. Got .85 for one earlier, so I will sell some more if price moves lower. Over last 12 earnings reports, one-day Biggest UP move: 42.2% , Biggest DOWN move: -19.4% , Average move: 15.8% . This trade is 19.4% OTM.
Call spread
#SPXcampaign STO $SPX Feb 18th 2025/2050 call spreads for 1.40.
Good morning…
I will look to sell SPX call spreads today, and other shorting ideas. At some point we will rise out of this rut and going short will be the wrong play. Until that happens, this is the play that is working. I believe 1820 needs to be tested before the correction can end.
Options Expiration 1/15/16
#OptionsExpiration
Expiring with max profit…
$DUST 22 and 23 calls
$KOLD 110, 114, 119, 120, and 130 puts
$KOLD 200 call
$NUGT 20 put
$NUGT 34, 45, 50 calls
$SVXY 30 put
$UVXY 20, 22, 23, and 35 puts
$UVXY 35/33 put spread
$UVXY 100, 110, 125 calls
$VLO 74 call
$ZSL 65/67.5 call spreads
$ZSL 70 and 72.5 calls
#Assignment
$KOLD 150, 155, 159, 160 calls, stock I bought today called away. Will sell roll positions in coming days.
Pre-expiration final trades
BTC $AAPL 100 puts for 2.90. Sold Tuesday as part of a strangle for 2.34, so .56 loss.
BTC $VLO 67 (covered) puts for .57. Sold for .87 avg price. Keeping my short stock position as I think I’ll have better chance to unload next week.
BTC $TZA July 65 calls for 14.00. Sold for 10.40 on Wednesday. Been rolling this one whenever it hits ATM… will sell the roll next week as I expect TZA goes higher.
STO $TZA April 85 for 6.05… adding 1 at each dollar increment: 4.05, 5.05, 6.05
STC $TLT Jan 15th 123 call for 2.75. Bought for 1.42 avg price.
Final put spread
#SPXcampaign STO $SPX Jan 29th 1700/1675 put spreads for 1.25. Sold three call spreads yesterday, and three put spreads today. I can do a whole month’s trading in two days in this market.
UVXY rocket
Getting uglier folks… was trying to exit these earlier with profit, but didn’t fill, and they could get worse. Closing now to avoid assignment. Will look to roll, but will wait for possibly higher prices next week (or today)
BTC $UVXY Jan 15th 50 calls for 2.10. Sold for .55 on Wednesday
also, escaped with this one with tiny profit:
BTC $UVXY Jan 15th 55 calls for .49. Sold for .57 yesterday.
Iron condors
#SPXcampaign Selling put spreads to offset call spreads sold yesterday.
STO $SPX Jan 22nd 1750/1725 puts spreads for 1.30. These expire next Friday.
UVXY & SVXY
I’ve gotten some questions about these and the way some of us sell them. I’ll give some answers here, and then I encourage anyone to ask further questions so the group can answer. Also, those experienced with trading these, please add to this post with your comments…
These both are based on $VXX, which is the “VIX Short-Term Futures ETN” that tracks $VIX futures contracts. It is infected by contango under normal market conditions, meaning over the long term it is always headed down (I will cover this phenomenon in next week’s webinar). But during volatile markets, in can have dramatic spikes up.
The $UVXY is an ETF that seeks to return 2x the VXX move on a DAILY basis. Because UVXY is two-times the VXX, the downward pressure over time is greater in UVXY than VXX, but the up spikes can be much larger.
The $SVXY is the 1x inverse of the VXX. The inverse aspect would indicate a general uptrend overtime, however, over the last 16 months, the SVXY has been under performing and can be slow in reaching new highs.
Most traders here predominantly SELL volatility when the VIX and VXX spike higher, and thus profit when volatility settles down. The most common methods are to sell UVXY calls and sell SVXY puts. Some also sell VXX calls, or sell spreads. But most of us sell these naked. All of us have reaped very strong profits from this strategy over the last 4 to 5 years. The difficult part is when we get into a correction and many positions sold on initial vol spikes go underwater. You need to control your position size and roll options when necessary so your account does not blow up during these times. ALSO, you must be leery if we are entering a bear market. None of these products existed in 2008, so no one really knows how they will perform in another financial crash or an extended downtrend. Personally, I have been more cautious lately with these products for this reason.
What works for me best is to sell near term way OTM strikes that are very unlikely to get hit. Last week I was selling UVXY Jan 100 to 125 calls for .30 or so each. As you can see, since then UVXY has only moved from 30 to 50. Also, I sell highest strikes at the furthest expiration dates, like Jan 2017 and 2018. These will return pretty high premium, but will deflate dramatically when volatility relaxes. Many traders will add strikes from all expirations, including weekly, and at multiple strikes.
We also will take assignment of SVXY stock, sometimes UVXY stock, and sell covered calls until stock is called away. Some of us will hold these positions through large drawdowns, knowing the volatility event will eventually end. I do not recommend that unless you have ice in your veins. We also sell naked PUTS in UVXY, especially in times like now when rallies like yesterday are usually followed by more volatility. Check out the long list of expirations that will be posted at the end of the day, and you’ll get an idea of some of the positions that are being traded.
Hope this helps! The traders here are all very helpful and can answer further questions. – Jeff
KOLD rolling
#ContangoETFs – I made the error of getting too bearish on this and I sold Jan calls recently that will now be costly to cover. Fool myself once. I will now stick to only further OTM calls and puts. Not posting specific trades because I’m doing them piecemeal, but today closing Jan 150, 155, 159, and 160 calls. I bought some stock at 166.10 to have called away. Also sold Feb 120 puts for 2.20 and May 270 call for 9.00. Will sell more in coming weeks… right now giving my margin a rest. Still short some deep ITM calls in Feb, and numerous Feb and May calls over 220. #Rolling
AAPL strudel
… I mean straddle. Short the 100 straddle today, breakevens at 97.70 and 102.30. We were spot on 100 yesterday, but it didn’t get cheap enough for me to close. It looks like this may hit breakeven, but a move closer to 100 would be nice…… #Pinning does not work so well in these volatile markets.
#VXXgame
STO $UVXY Jan 29th 80 calls for 2.30
STC $VIX Jan 19th 19 call for 7.30. Bought for 2.87 avg price in December. Still holding more.
(put spread)
The parentheses are my attempt to be quiet about selling a put spread, so maybe the market won’t notice and let this one slip by. But taking an advantage of the extreme move.
#SPXcampaign STO $SPX Feb 12th 1650/1625 put spreads for 1.30.
Monday Holiday
Don’t forget U.S. markets are closed Monday, but international markets are OPEN. This could mean anything’s possible for Tuesday’s open. So although it is a shorter week for options expiration, be careful with any positions going into the weekend.
Good morning…
Although I thought we might remain calmer until next week, our trip down to October 2014 lows (1820) is resuming now. I don’t think we can look for any meaningful bounce until at least that level.
UVXY puts
BTC $UVXY Jan 22nd 22 puts and 22/20 put spreads for .02. Sold for 1.00 and .55 respectively on 12/31.
STO UVXY Feb 5th 27 puts for 1.18
STO UVXY Jan 22nd 30 puts for .52
SPX in rally, but VIX not plummeting and UVXY sideways
and another…
#SPXcampaign STO $SPX Jan 22nd 1995/2020 call spreads for 1.25. This is the third I’ve sold today. Cutting it a bit close, especially if rally continues into expiration tomorrow. But I believe call spreads are still the safest bet.
More calls
#SPXcampaign STO $SPX Feb 5th 2025/2050 call spreads for 1.45
Reversal
#SPXcampaign Put spread stopped at the bottom again! Always seems to work that way, aye? I mentioned this the other day, but 22 of the 25 biggest rally (up) days in the Dow have been during corrections, with Dow beneath its 200 dma. Huge rallies now are a good chance to short the market. I’m looking for the high today to sell more call spreads and UVXY puts.
ETF Webinar – January 20, 2016
A new webinar next week for what I call #ContangoETFs; the bull and bear 2x and 3x ETFs and ETNs that always head toward zero; how they work, and how to keep an edge in trading them. It will be Wednesday, January 20 at 5pm ET, 2pm PT. Limited spaces available; reply below this post if you’d like to attend.
some trades…
STO $UVXY Jan 15th 55 calls for .60
STO $TZA April 85 call for 5.05, added to the one I sold for 4.05 yesterday
BTC $BOIL Jan 15th 25 calls for .05, for no other reason than I forgot I had a GTC order in. Sold for 1.10 in November
Puts stopped
#SPXcampaign Hand slapped again… tried selling my first put spread in a week yesterday, but did it too early and already stopped out. Need to stick with call spreads.
BTC $SPX 1810/1785 put spreads for 2.90. Sold yesterday for 1.25.
Call spreads
#SPXcampaign STO $SPX Jan 29th 2000/2025 call spreads for 1.35.
Managing options positions through max Payne
I made a presentation last night to a local Options Trading group about #ContangoETFs, and I included the recent $KOLD trade through the swing from 90 to 220, where many of us held ITM naked calls on the whole ride up. I shared @fuzzballl‘s tactics of selling ITM puts, and of selling the long leg of a way-ITM spread while it was riding high. One member said you need to have “ice in your veins” to handle these types of trades without panic.
It is true that the way many of us trade UVXY and other naked options is not for everyone. I stressed last night and I stress again now, you must know the products you’re trading and you MUST control position size so your account can handle worst case scenarios.
For new members or followers to Bistro, be sure to ask any of the traders here any questions about their positions. This is a good group, always willing to offer advice. I learned much of what I do from many of these people, including @optioniceman who first taught me the tricks to selling naked premium.
(And if you want to see some of the KOLD trading, use search box in the right column and enter the term “KOLD”)
More UVXY
#VXXGame STO $UVXY Jan 2018 85 call for 24.00
STO $UVXY March 18th 165 call for 3.00
Also, STC another $TLT long 123 call (Jan 15th) for 2.50.
SPX calls closed
#SPXcampaign BTC $SPX Jan 29th 2060/2085 call spreads for .20. Sold last Friday for 1.50.
This looks like a serious drop.
TLT long calls, VLO short stock
#LongCalls Scaling out of $TLT Jan 15th 123 calls I bought for 1.42 avg back in Dec. Sold half the position today for 1.45 and 1.75. Also holding Feb 19th 123 calls which I will hold since I have more time.
#ShortStock Bought to cover a portion of my short $VLO stock position at 64.50, assigned at 65, cost basis currently 68.00. I have several short puts at 67.00, now one of them naked, but I trust we’ll be back up there soon.
TZA rolling
#ContangoETFs #Rolling one position and opening another one. The April positions started as Jan 50’s, then rolled to April 60’s, now rolled to July 65’s. I can do this all year (at least until I run out of expiries).
BTC $TZA April 60 calls for 9.00 (sold for 5.85 last Thursday)
STO $TZA July 65 calls for 10.40
STO $TZA April 85 call for 4.05 (order in to sell another at 5.05)
SPX long spread closed
#SPXcampaign STC $SPX Jan 22nd 1800/1775 put spreads for 1.20. Bought last Friday for 1.10.
SPX put spread
#SPXcampaign STO $SPX Jan 22nd 1810/1785 put spreads for 1.25
This spread is higher than the 1800/1775 I bought last week for 1.10. I will be closing that purchased spread today, as the window for profit is closing… I believe I can get out for at least breakeven today… I sold one of them for a double on Monday; now I can see that was my best chance to close all!
What Ramie said
#VXXGame
STO $UVXY Jan 15th 50 calls for .55
STO $UVXY Feb 26th 85 calls for 3.00
Another 1% down move in SPX but $VIX is barely budging.
Threading the needle
#ContangoETFs STO $KOLD Jan 15th 130 puts for 1.40.
KOLD between 130 and 150 is my sweet spot for January expiration… and then plummet below 100 for February expiry. Is that too much to ask?
Indexes rolling over, TLT spiking…
Indexes rolling over, TLT spiking up
SPX call spread
#SPXcampaign STO $SPX Feb 12th 2070/2095 call spreads for 1.20.
More profit-taking
#SPXcampaign BTC $SPX Feb 5th 20175/2100 call spreads for .40. Sold for 1.40 last Friday.
More ETF action
#ContangoETFs
STO $DUST March 24 call for 1.75
STO $KOLD Jan 15th 159 call for 2.35
STO $KOLD May 280 call for 6.20
AAPL straddle
#Pinning #ShortStraddle
STO AAPL Jan 15th 100 straddle for 2.34.
Based on gigantic Open Interest on the $AAPL 100 calls and puts, this is a pinning play. Pinning tends to work best on monthly expirations. This has a profit zone between 97.60 and 102.40. You can also reduce your risk and make this an #IronButterfly by buying 102 call and 98 put, which should give you 1.40 credit with .60 max risk.
Paring upside risk
#SPXcampaign BTC $SPX Jan 29th 2060/2085 call spreads for .50. Sold for 1.50 on Friday. This was a double-sized position so I closed half at 66% profit. Leaving the rest for now.
Gold plunge
#ContnagoETFs BTC $NUGT March 70 call for .35. Sold for 1.85 on Dec 4th
STO $DUST Jan 29th 20 calls for .80
Good morning…
Futures soaring as earnings season begins… Monday saw a new a new high in the VIX, briefly, before closing lower. Have we seen the peak in volatility, or is more to come? I’m expecting more, with SPX below 1900; but now I’m more cautious. I will be still selling call spreads at higher levels, and watching my lower ones in case rolls are necessary. Some of the biggest rallies occur during corrections. Something like 22 of the 25 biggest UP days in the Dow have occurred during downtrends, when the Dow was under the 200 dma (including just this past August 26th, which was the third highest increase in history). It’s important to keep this in mind on these big rally days during a correction.
SPX call spread added
#SPXcampaign Sold to Open $SPX Feb 12th 2060/2085 call spreads for 1.25.
UVXY same-week puts
#VXXGame STO $UVXY Jan 15th 35 puts for 1.00
STO UVXY Jan 15th 35/33 put spreads for .45 (smaller account)
UVXY new strikes
#VXXGame Some higher strikes added, up to 70 in Feb weeklys and 74 in the Feb monthly.
STO $UVXY Feb 19th 74 call for 6.75
STO $UVXY Jan 22nd 80 call for 2.00 (adding)
SPX calls closed
Missed a fill on this morning’s pop, so disappointingly did not add a new spread. However, these trades…
#SPXcampaign
BTC $SPX Jan 22nd 2050/2075 call spreads for .20. Sold for 1.45 on Friday.
STC $SPX Jan 22nd 1800/1775 put spread for 2.20. Bought for 1.10 on Friday. This is only one of the spreads; letting the rest ride and scale out as SPX drops further.
KOLD pop
#ContangoETFs Selling whatever I can for options that expire Friday…
STO $KOLD Jan 15th 155 calls for 1.50
kick up DUST
#ContangoETFs STO $DUST June 25 call for 2.15
Pre-market fill
#SPXcampaign In pre-market, BTC $SPX Feb 5th 2130/2155 call spreads for .20. Sold for 1.25 last Tuesday.
Options Expiration 1/8/16
Expiring with max profit…
$SPX 1900/1875 put spreads (sold at close yesterday for 1.20)
$SPX 2030/2055 call spreads
$SPX 2060/2085 call spreads
$SPX 2090/2115 call spreads
$SPX 2100/2125 call spreads
$SPX 2175/2200 call spreads
$UVXY 22 puts
$UVXY 22/20 put spreads
$VLO 74 call
$VLO 67 (covered) put
Have a great weekend, everyone!
UVXY calls / VIX call
#VXXGame Added these at the close:
STO $UVXY Jan 22 80 calls for 1.50 (highest strike)
STO $UVXY Jan 15 100 calls for .30 (expire next week)
and…
STC $VIX Jan 19th 19 call for 6.20. Bought for 2.87 average in late December. Still holding 4 more into next week.
more KOLD cut
#ContangoETFs Two-day rally in Nat Gas and $BOIL is likely to see some relaxing on Monday. Hoping $KOLD waits for another week before getting below 120, but it’s definitely headed there.
STO KOLD Jan 15th 114 put for 2.25
STO KOLD Jan 15th 110 puts for 1.30
One last call spread
#SPXcampaign STO $SPX Feb 6th 2075/2100 call spreads for 1.40. That should be enough for today.
Filled at 1.10 for the…
Filled at 1.10 for the long Put Debit Spread below. #SPXcampaign
BUY a spread
#SPXcampaign Yes, that’s right. I am trying to buy the $SPX Jan 22 1800/1775 put spread. I missed my fill as this drop started happening, so I will try on the next bounce. As I believe 1900 and lower is in the cards for next week, I am adding the PURCHASE of spreads into the strategy on occasions where direction seems apparent, and the cost of purchasing is more than covered by selling call spreads. The intention here is not to bring the spread ITM, as I don’t expect 1800 by the 22nd. But this trade will make between 100% and 200% if we get down to 1900 next week. I will update if I get filled.
Call spread closed
#SPXcampaign I had this GTC order in all week, but this one did not close at yesterday’s lows, and instead closed at today’s open. I think it goes to show that when volatility is high, call spreads have difficulty closing due to fluctuating prices, even as the index is sinking far away from the strikes.
BTC $SPX Jan 29th 2160/2185 call spreads for .10. Sold for 1.35 on 12/29.
New followers…
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Another call spread
#SPXcampaign STO $SPX Jan 29th 2060/2085 call spreads for 1.50.
SPX call spreads
#SPXcampaign Started with this one, trying for more…
STO $SPX Jan 22 2050/2075 call spreads for 1.45.
Options Bistro 