New intraday high in SPX would be 2008.02…
Author Archives: Jeff
Good morning…
…from Portland, where the city is covered in ice and frozen in place. The market, however, far from it. Should we try to catch a falling icicle today, or is more pain to come? The VIX indicator will likely fire another warning shot this morning as volatility continues to rule the day. I’m looking for a really sharp down day and big VIX spike before I expect to see SPX move back toward 2100. Keeping light on the put spreads and adding call spreads whenever I can.
SPX closed in pre-M
#SPXcampaign In Pre-market, BTC $SPX Jan 14th (monthlys) 2135/2160 call spreads for .20.
Options Expiration 12/31/15
Expiring with 100% of max profit:
$DUST 20 calls
$NUGT 34 call
$SPX 2005/1980 put spreads
$SPX 2100/2125 call spreads
$VLO 66 puts (covered)
Have a great New Year’s weekend every one! See you on the other side.
Adding SPX one-week condor
#SPXcampaign Selling $SPX Jan 8th 2100/2125 call spreads, and 1970/1945 put spreads. Looking for 1.25-1.35 each side. Small in size. This will complete my #Rolling for the week. Adding more to the call spread I started this morning, and opening new lower striked put spreads. My 2000/1975 puts survived the day, just barely. Since it’s the only put spread I have I’m okay holding it over a weekend, even though market it precarious.
UVXY puts
#VXXGame STO $UVXY Jan 15th 23 puts for .90
STO UVXY Jan 22nd 22 puts for 1.00
STO UVXY Jan 22nd 22/20 put spreads for .55 (smaller account)
SPX call spread roll
#SPXcampaign STO $SPX Jan 8th 2100/2125 call spreads for 1.30, as part of a roll from this week’s call spread that was stopped on Monday. Getting a bit whipsawed this week, as I expected a flat to bullish week before volatility came in next week. Maybe I had that backwards, or maybe this week being down is the start of a January correction early. In any case, I am now watching next week’s 2000/1975 put spread, which is approaching its stop level. It’s the only put spread I’m holding beyond this week. I want to sell more call spreads, and will do if SPX can gain its footing today.
KOLD pop
Of course, my morning post yesterday probably signaled a low in $KOLD. Nothing like shouting that it will be below 100 in two weeks to get it to shoot higher immediately. Still, taking some put side risk off and adding some calls.
BTC $KOLD Jan 114 puts for 1.50. Sold for 3.45 on 12/3
BTC $KOLD Feb 90 put for 2.00. Sold for 4.00 on 11/23
STO KOLD Feb 240 call for 5.00
STO KOLD Feb 250/275 call spreads for 1.00 — the margin to sell 4 of these was less than selling one 250 call for 4.00
Heavy metals
#ContangoETFs
STO $DUST Feb 25 calls for 1.05
STO $ZSL May 80 call for 3.00
VIX Indicator status
#SPXCampaign – Based on the behavior of the $VIX in recent days, I am not convinced that we are moving much higher. Yesterday the VIX saw a healthy pop, even though the index pullback was minor. And today we are not seeing as much of a VIX drop as you would expect with such a bullish market. Last week we got two closes below the 78.6% Fib line, but the confirmation of upside bias was denied when the third consecutive day failed yesterday. Now we will see if it can get back below there today (15.80).
SPX IC roll
#SPXcampaign #Rolling #IronCondor
Rolling the earlier stopped call spread into an iron condor. Selling puts first, and will wait for higher price in index to sell calls.
STO $SPX Jan 8th 2000/1975 put spreads for 1.25.
SPX call spread opened
#SPXcampaign STO $SPX Jan 29th 2160/2185 call spreads for 1.35, with SPX at 2074.
UVXY puts
#VXXGame STO $UVXY Jan 15th 22 puts for 1.10. Added to the 20 puts previously sold.
SPX call spread closed
#SPXcampaign BTC $SPX Dec 31st 2085/2110 call spreads for 4.50. Sold last week for 3.90 as a roll. Will look to replace with a higher Jan 8th spread, but will wait as I believe we will move higher this week.
KOLD roll
#ContangoETFs #ReverseRoll
BTC $KOLD Jan 150 put for 21.00. Sold for 4.10 on 12/14
BTC KOLD Jan 140 put for 14.00. Sold for 3.10
STO KOLD Feb 110 call for 35.60 (ITM)
STO KOLD May 275 call for 7.00
Good morning….
Nat Gas futures up again… seems clear we are in a sustained bounce/rally, even as other energy still wavers. Not sure if the bottom is in, but if the upticks continue, and with the magnified effect on 2x ETF’s, $KOLD is set to collapse back below 100 with in a couple weeks. I am #ReverseRoll my way out of short puts, able to still sell calls above 200 and even 300 before they die a slow death. I was trying to get out of my 150 put yesterday but thought maybe we’d get a small pullback in Gas today. No such luck, and now KOLD is opening 12 points lower. No more waiting… closing 150 and 140 puts today. Fortunately, ITM calls, including the 150 CALL I sold for 64.00, are coming in nicely.
Stopped KOLD
#ContangoETFs #ReverseRoll
BTC $KOLD Jan 170 put for 22.60. Sold for 6.80 on 12/15
STO $KOLD May 320 calls (x3) for 9.40, highest available strike
ZSL calls
#ContangoETFs First ZSL calls I’ve added in awhile, I haven’t been playing as much since the reverse split since so much attention has been on KOLD
STO $ZSL Jan 15th 65 calls for 1.60, adding to 70 and 72.5 calls
Good morning…
Hope everyone had a wonderful weekend! Another low volume week… I’m watching for indications of what will happen in January, but not reading too much into minor moves this week. Will look to continue selling call spreads on rallies, but keeping put spreads few and close to expiration.
Options Expiration 12/24/15
#OptionsExpiration Expiring with 100% of max profit…
$SPX 1990/1965 put spreads
$UVXY 50 calls
$VLO 67 covered puts
Happy Holidays to everyone! Thanks for making the early days of Bistro so successful. I look forward to growth and much more in 2016.
Stone KOLD rolling
#ContangoETFs #ReverseRoll
Yesterday BTC $KOLD Jan 170 put for 13.60
Today STO $KOLD Feb 240 call for 14.00
Complete 4-day iron condor
#SPXcampaign STO $SPX Dec 31st 2100/2125 call spreads for 1.55. Combined with put spread sold this morning, completes iron condor for 2.80 total. With 3.00 stop on either side, max loss is .20.
4-day put spread
#SPXcampaign STO $SPX Dec 31st 2010/1985 put spreads for 1.25. Expire next Thursday on another shortened trading week. Will look to make it a condor.
Call spread closed
#SPXcampaign BTC $SPX Jan 8th 2160/2185 call spreads for .15. Sold for 1.25 on Dec 9th.
VIX Indicator… bullish reversal?
The $VIX closed below 15.80 today, which is the 78.6 retracement level for the 12/14 peak. Three consecutive closes below 15.80 will nullify the recent Downside Warnings and fire an Upside Warning. It’s entirely possible this will happen in the coming days since we are in low volume vacation mode. Although the upside signal does not always mean a huge rally, it almost always has indicated the cessation of volatility since the year 2000.
Five-hour spread
#SPXcampaign BTC $SPX Dec 24th 2030/2010 put spreads for .10. Sold this morning for 1.10. Could let it expire, but when the market gives you a gift, TAKE IT. (credit to Dan Sheridan for that line)
Another call spread
#SPXcampaign STO $SPX Jan 14th 2135/2160 call spreads for 1.55. Avoided last week’s whipsaw and didn’t sell any spreads in this expiration. Starting with this one…
VXX long put
#VXXGame Sold to close $VXX March 25 put for 7.50. Bought for 5.00 on Sept 2nd. This was a GTC order to collect 50% on the trade, filled today.
SPX rolled calls
#SPXcampaign #Rolling STO $SPX Dec 31st 2085/2110 call spreads for 3.90. This is the second half of the roll from this morning’s stopped spread, totaling a .80 credit for the roll. I will roll again should SPX get much above 2075. Mainly, I want to avoid going ITM, since that makes rolling much more difficult.
NKE Earnings
#Earnings BTC $NKE Dec 24th 123 puts for .04. Sold for 1.00 yesterday.
KOLD snap?
#ContangoETFs STO $KOLD Jan 140 put for 3.10. Have several puts, but will #ReverseRoll them into calls if any of them become ATM.
UVXY spreads
#VXXGame Sold to Open $UVXY Jan 8th 22/20 put spreads for .55, in my 401K and smaller accounts.
SPX call spread closed
#SPXcampaign BTC $SPX Dec 24th 2060/2085 call spreads for 4.20. Will roll into various put and call spreads.
I’m closing and rolling this…
I’m closing and rolling this week’s $SPX 2060/2085 call spread
UVXY puts
#VXXGame After-hours fills:
STO $UVXY Jan 8th 22 puts for .92
STO $UVXY Jan 15th 20 puts for .80
SPX same week condor
#SPXcampaign STO $SPX Dec 24th 2060/2085 call spreads for 1.20. Combined with puts sold earlier make an iron condor. Stop is 3.00 if one of the sides hits it, meaning lax loss on full trade is .05.
NKE earnings
#Earnings STO $NKE Dec 24th 123 puts for 1.00. Biggest UP move: 12.2% , Biggest DOWN move: -5.1% , Average move: 5.2% . This trade is 5.4% OTM.
CMG IB attempt
#IronButterfly I am trying for an iron butterfly on CMG, selling this week’s 500 call and 500 put, and buying the 490 put and 510 call for protection. I want 9.00 for it, leaving me a max risk of 1.00. It’s not trading there yet, but may fill later as the OTM options reduce in price.
SPX same week put spread
#SPXcampaign STO $SPX 1990/1965 put spreads for 1.75. These expire in 2 days. Will try call spread if we get more strength today.
Generally avoiding put spreads under current VIX Indicator warnings, but I’m not too worried about a big move this week.
Revenge is a dish best served KOLD
#ContangoETFs Nat Gas chart finally looking constructive with possible bottom in place. Dumping my only ITM put with a #ReverseRoll to higher calls. As long as we get some stabilization in gas prices, KOLD will dump.
BTC $KOLD Jan 210 put for 30.00. Sold for 21.90 on 12/15.
STO $KOLD Feb 270 calls (2) for 16.50
SPX call spread
#SPXcampaign STO $SPX Jan 22nd 2130/2155 call spreads for 1.30. Keeping up with a full campaign on the call side while remaining careful on the put side, due to multiple VIX warnings. Currently I’m holding no put spreads, and other than this new one only a few call spreads, all well into profit. I expect this week to be calmer, but fireworks could start erupting next week or week after. But it’s too tough to call; as Art Cashin said, this is the toughest market he’s seen in 50 years, which is a few more years than I’ve been at this. Also one more year than I’ve been alive.
See you Monday…
Friday’s move lower indicates volatility is ruling the month… but will it continue in the typically lower volume weeks remaining? Will the underperforming hedge fund and mutual fund managers be scrambling to make up for bad 2015 performance?
UVXY after hours
#VXXGame filled at 4:12 ET
STO $UVXY Dec 24th 50 calls for .67
STO $UVXY Jan 15th 150 calls for .85
Options Expiration 12/18/15
Expiring with 100% profit:
$SPX 2145/2170 call spreads
$AZO 700 puts
$BOIL 25, 30, 65 calls
$DUST 30 call
$FDS 155 puts
$KOLD 170, 185, 195, 200 puts
$UVXY 20 puts
$VLO 72 call
$VLO 67.5 put (covered)
$ZSL 65 and 67.5 calls
No assignments.
Oh, what do we have in store for the coming weeks?
Calm dump?
As much as $SPX was dumping at the end, the $VIX was pretty calm.
TLT long
#LongOptions BTO $TLT Jan 15th 123 calls for 1.69
BTO $TLT Feb 123 calls for 2.50
Small positions, but long calls in TLT paid me well in past corrections.
SPX closed
#SPXcampaign BTC $SPX Jan 14th 1875/1850 put spreads for 2.15. Sold yesterday for 1.25. I am not carrying any bullish index positions through the weekend.
Hedge
BTO $VIX Jan 19th 19 calls for 3.00
Feed a KOLD, starve a BOIL
#ContangoETFs #Rolling $KOLD calls while KOLD puts and $BOIL calls expire today.
BTC KOLD Dec 200 calls for 13.20
STO KOLD Jan 255 call for 13.60
STO KOLD Feb 300 call for 16.00
SPX calls closed
#SPXcampaign BTC $SPX Dec 24th 2110/2135 call spreads for .20. Sold for 2.00 last Friday as a #ReverseRoll from stopped put spread. This spread got up above 4.00 on Wednesday after Fed.
FDX earnings butterfly
#Earnings #ironbutterfly
BTC $FDX Dec 18th short 149 puts & calls for 1.45. Sold on Wednesday for 4.15, so 2.70 profit. Thanks for the idea, @mortlightman!
Quadruple Witching could add to Volatility
The exceptionally large Open Interest in options expiring this week could increase volatility on Friday and move stocks lower. It could also move them higher, but given where Futures are before the open, down seems to be the new black. As our VIX Indicator is currently under FOUR warnings (see side bar on the right), the risk is to the Downside.
The massive expiration was explained further on Fast Money last night: http://www.cnbc.com/2015/12/17/a-massive-expiration-has-traders-on-edge.html
SPX calls closed
#SPXcampaign BTC $SPX Dec 31st 2165/2190 call spreads for .20. Sold for 1.25 on Dec 4th.
SPX after hours trading
For those that don’t know, you can trade $SPX options from 3am to 9:15am ET weekday mornings, and also from 4p to 4:15p after the market closes. You may need to contact your broker to set up this ability.
What I wasn’t sure about was Monthly expiration options, which stop trading at Thursday’s close but whose settlement price is set after Friday’s open. I just confirmed you CAN trade these until 4:15pm on Thursdays (I closed a 1-lot 1975/1950 put spread that expires in the morning for .10 at 4:05pm)
SPX put spread
#SPXcampaign Since I had precisely zero put spreads, dipping a toe back in:
STO $SPX Jan 14th 1875/1850 put spreads for 1.25.
The reason DUST won’t go up
I’ve been working on a Webinar for #ContangoETFs and with the discussion below on $DUST, wanted to pass along part of what I’m preparing. When you have a levered ETF, they are designed to track the DAILY move of the underlying, multiplied by 2 or 3. So if $GDX is up 1% on the day, $NUGT will be up 3% and $DUST down 3%. But then it resets next day. This creates a compound tracking error that will NOT track the underlying beyond a one-day period. In fact, it will drag both the positive & negative levered ETFs down. Here’s an example:
Let’s say the underlying and long and short 2x ETFs all start at $100. We then watch price action as the underlying swings back and forth 10%:
Day 1: underlying up 10% = 110.00
Long 2x up 20% = 120.00
Short 2x down 20% = 80.00
Day 2: underlying down 10% = 99.00
Long 2x down 20% = 96.00
Short 2x up 20% = 96.00
Day 3: underlying up 10% = 108.90
Long 2x up 20% = 115.20
Short 2x down 20% = 76.80
Day 4: underlying down 10% = 98.01
Long 2x down 20% = 92.16
Short 2x up 20% = 92.16
As you can see, with equal up and down days repeated, the underlying moves down slowly but the 2x ETFs go more quickly. Repeat this way for 6 months and both ETFs would be worth only $2.54.
So GDX has been bearish since its 2011 highs… NUGT has absolutely collapsed as a result of this compounding, but DUST has stayed relatively flat for the same reason.
Interesting, huh? That’s why these “ContangoETFs” all work… even if you don’t have the actual “contango” from futures roll, you get this compounding tracking error dragging them all down.
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Time to come in from the KOLD?
Ginny was asking me and I was considering yesterday… time to buy an ATM put for the reversal? The May 210 put is going for about 49.00. If we get our reversal by then, it will be at least a double. Thoughts on this?
Also, STO $KOLD Jan 150 call for 64.00 as part of a roll from Dec positions. Actually REDUCED my margin because I have so many puts.
And, STO $KOLD Dec 195 call for 3.10… expires tomorrow. Threading the needle for this to end at 200 on the nose tomorrow.
TRIN-X just popped over 3.00
TRIN-X just popped over 3.00
KOLD away
#ContangoETFs Overnight, two Dec calls took away my stock, which was bought at an average price of 203.00
Assigned: Dec 18th 115 call, sold for 19.70 on 11/19.
Assigned: Dec 18th 125 call, sold for 14.60 on 11/19.
Have we reached a bottom? Still have a couple 200 calls from Dec, and 5 more in Jan/Feb. Will look to sell some ITM calls to make up for losses on the assignments above. Should be a rip roaring ride back down, even if NatGas doesn’t rally hard… just needs to stop going down and this ETF will die.
Site updates and expansion
On the right hand column of this page I have enhanced the VIX indicator Status to make current condition more clear. I will update this each day.
I am working on more changes, and I welcome any feedback on something I can include to he more helpful for everyone’s daily trading. Also, if there are any features you would like to contribute, let me know.
Also, I am always looking for additional followers and contributors. Feel free to invite anyone you know, and offer me any suggestions on ways to promote the site.
Thanks all for being here!
UVXY call closed
#VXXGame Reducing exposure, although my overall VXX position is light anyway:
BTC $UVXY Jan 2017 85 call for 9.60. Sold for 23.00 (avg price) over the summer.
KOLD put
#ContangoETFs STO $KOLD Dec 18th 195 puts for 2.00
Dud
How boring was that? Scalping $SXVY and $UVXY back and forth… buy 1,000 shares at a time, looking for .10 and .20 moves, sell, then switch to the other.
NUGT short call
#ContangoETFs following the herd, BTC $NUGT Jan 2017 60 call for 6.40. Sold for 25.00 on Oct 15th.
Straddles
Since ATM options are actually pretty cheap, I’m looking to buy straddles in $TLT and $HYG, looking for big moves in either direction (or maybe both directions) on today’s announcement. Small positions, so not risking much. If they don’t pay off today they could tomorrow or Friday.
Looking at this week’s expiration, HYG 80 straddle and TLT 121-122.
Good morning…
Fed day… if they act today, it will be the first day in history that we have a rate raise AFTER quantitative easing. In other words, no one knows what the reaction will be. I’ll be looking for possible day trades with $SVXY and $UVXY, and maybe $SPY or $TLT. I will consider short term #SPXcampaign spreads, but more likely hold off until the market settles into its direction in the coming days.
KOLD you so…
Spike spikey.. this one may never go down again. IMHO traders think they are smarter than market… global warming means no one will ever need Nat Gas again; easy to see 500 in the cards. See my previous posts going back to the 80’s on how to avoid this. Newbies may have face ripped off!
(For those who were not members of OptionMarketMentor, that was a reference you won’t get, but just know that it is funny)
And now in all seriousness, as Iceman indicates, these things can have violent moves. Look at Monthly chart of $KOLD and see what happened last time we got this high. If you aren’t trading this, don’t start now! I am rolling out of my December short calls in various ways, including rolls to new calls, reverse rolling to puts, buying stock, and selling new puts. I have also closed some puts for .10 & .15, which releases about 5K in margin per option!
BTO 100 shares for 217.55 (adding to some bought at 187)
BTC Dec 18th 149 puts for .15. Sold for 1.80 on 12/10
BTC Dec 18th 155 puts for .15. Sold for 2.60 on 12/8
BTC Dec 18th 135 put for .10. Sold for 2.90 on 12/3
BTC Dec 18th 118 call for 99.60. Sold for 20.00 on 11/11
STO Dec 18th 200 puts for 2.80
STO Jan 15th 210 put for 21.90
Adding Your Picture or Avatar when you post…
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SPY calls
#LongCalls Yes, people, I am buying something. Small position, just playing for bullish move into expiration this week, and a pop after Fed announcement.
STO $SPY Dec 18th 204 calls for 2.50, avg price.
Otherwise keeping cash on reserve for post-Fed trading.
Good morning…
All hinges on the Fed… many traders are sticking to short term as know one knows how that market will react to tomorrow’s announcement on rates. We have just been through a 5.2% decline (from 12/2 high to yesterday’s low)… is that the extent of the “correction” the $VIX has been signaling? A rally this week into monthly expiration seems feasible, but then what? I am avoiding new index trades until we see how things shake out, and looking for shorter term or ETF opportunities.
KOLD comfort
#ContangoETFs STO $KOLD Dec 18th 185 puts for 3.05
FDS earnings
#Earnings STO $FDS Dec 18th 155 puts for 1.00. Biggest UP move: 9.7% Biggest DOWN move: -6.4%. Average move: 3.6%. This trade is 7.5% OTM.
SPX all put spreads closed
#SPXcampaign. I have now been stopped on all put spreads. I Reverse rolled one into calls on Friday, but otherwise have made no other rolls.The strategy is not viable in this environment, with 4 Downside Warnings in effect. Selling calls spreads when down so much is also not viable. Fed decision could cause a massive rally.
DUST calls
$ZSL hitting a four-month high
$ZSL hitting a four-month high
