#SPXcampaign BTC $SPX Dec 31st 1960/1935 put spreads for 3.30. Tried to get out at a lower price on the last bounce, but it was too minor. Will look to roll if we go lower today.
Author Archives: Jeff
Sinking…
$VIX just peaked 2 cents shy of a downside signal, 18.34 is 25% above Tuesday’s close. $SPX hitting support level at 2050. May get a bounce here but no telling whether we go lower today or tomorrow.
VLO covered puts
#Earnings #CoveredPuts STO $VLO Dec 24th 67 covered put for .85. I am short the stock, cost basis around 67.
AMBA earnings
#Earnings This one has had a big move down, so I’m playing it safe with a condor rather than naked. Short strikes are within its historical moves, but it has only has 11 quarters since IPO and the recent move down could mean a record move.
STO $AMBA Dec 4th 52/54/66/68 iron condors for .85. Biggest UP move: 8.6% , Biggest DOWN move: -8.5% , Average move: 4.4% . Short strikes are 10% OTM.
SPX puts closed
#SPXcampaign BTC $SPX Dec 4th 2035/2105 put spread for 1.45. This was sold as a condor on Monday for 2.60. Calls will expire tomorrow. Decided to close early to take about 40% of profit and not have the concern from further downside, especially with jobs number tomorrow that could have any effect. I will have plenty to roll if we keep going down.
SPX Dec 31st puts
#SPXcampaign STO $SPX Dec 31st 1915/1890 put spreads for 1.25.
This is the second put spread for the week.
If weakness continues some rolling will have to happen.
$VIX levels to watch are 18.34 and 19.20. These are the next two signal levels for a downside warning.
AVGO earnings
#Earnings BTC $AVGO Dec 4th 120 puts for .05. Sold yesterday for 1.00.
AVGO EARNINGS
Getting to this late, but this one almost never moves down on earnings. You have to go back to Dec 2010 for its only significant down move, -6.5% Last 12 reports, Biggest UP move: 14.7% , Biggest DOWN move: -0.2% , Average move: 6.2% . This trade is 9.4% OTM.
STO $AVGO Dec 4th 120 puts for 1.00.
UVXY calls
#VXXGame STO $UVXY Dec 11th 32 calls for .75, to offset 23 puts on same expiry. May add more if premium goes up. Won’t hold these if UVXY gets up toward 30; in that case I would roll into longer dated, much higher calls.
Is this down move a…
Is this down move a reaction to Fed?
SPX roll
#SPXcampaign STO $SPX Dec 24th 1990/1965 put spreads for 2.00. This is a roll from stopped spreads on 11/6. Does not cost much in margin since I already have extra call spreads on this expiry from an earlier roll.
KOLD puts
#ContangoETFs I’m a bit stretched margin-wise to sell more calls, but puts still going for great rates, and I get margin credit for selling them.
STO $KOLD Dec 18th 128 puts for 1.90, adding to my position.
Long Term VXX longs
#VXXGame Today I STC $VXX Jan 15 2016 20 puts for 3.35. I started buying these in December 2013, and added over the last two years. My average price ended up being 2.75. The best time to have sold them was a few months ago, before the August crash, when VXX hit new lows and these options traded for over 6.00. But I held on and time decay took its toll. I haven’t had a chance to buy 2017 puts because we are overdue for a reverse split, but I will try this again when the price is right for the 20 puts on $VXX or $UVXY, either 2017 or 2018 LEAPs. I am also long the VXX March 2016 25 put, bought for 5.00, now trading for 8.60.
UVXY puts
#VXXGame Added a couple more at lows today. These are getting a bit frothy; may end up in a roll situation, but it may start getting tougher for it to go lower quickly.
Adding to positions:
STO $UVXY Dec 11th 23 put for 1.20
STO $UVXY Dec 18th 20 put for .75
Also short this week’s 23 puts.
UVXY, new low
For the first time since August 4th, $UVXY just notched a new all-time low by breaking below 24.34. Four months is quite a stretch for this dog to have another day.
$VXX is still over 15% above its August 5th all-time low of 15.48.
$SVXY has once again been the laggard, as recently discussed by @vxxkelly; at 61.00 it is 37% below its June 24th all-time high of 98.13.
SPX puts closed
#SPXcampaign BTC $SPX Dec 17th 1890/1865 put spreads for .20. Sold as a roll on Nov 13th for 2.00.
SPX put spread
#SPXcampaign STO $SPX Dec 31st 1960/1935 put spreads for 1.30, with SPX at 2101. This is my first put spread of the week, having missed a fill on Monday’s weakness. Action looks bullish; I believe we will grind sideways to higher into year end. I doubt we’ll get a strong push higher, but I have kept all call spreads above 2130 to be safe.
UVXY puts
RUT back down to almost…
RUT back down to almost flat on day
All cylinders
Well, I did sell a same-week condor yesterday, but missed a fill on a Dec 31st put spread… thought I’d get a chance this morning, but no beans… Indices off and running… sell some call spreads if you need them!
UVXY puts
#VXXGame STO $UVXY Dec 11th 23 puts for .65. These will replace the 23 puts I have for this Friday, which should expire. Volatility has been in consolidation with the indices, and I expect that to continue. If it doesn’t, these are easy to roll.
Short options, Margin, and retirement accounts
I got this question over the weekend:
Question:
What type of account are you trading in when you short naked? Regular margin/Portfolio margin account? Trying to find out what the more experienced folks setup when the run the types of strategies you use and not get killed on the tax side, but have all the strategies open to me unlike an IRA style acct.
Answer:
I use two different account types. My main account is an LLC account with portfolio margin… it is set up as a business partnership with family members. There are no restrictions on the types of trades. I also trade with 401K accounts… these are retirement accounts sponsored by the LLC for the members of the LLC (who are technically employees). Each member, including myself, rolled over portions of IRA accounts into these 401K’s. At Interactive Brokers, 401K accounts do not have restrictions against naked options. They are Reg-T accounts, so margin requirements for shorts are higher than portfolio margin. I typically sell naked options in my LLC account and stick to spreads in the 401K accounts (almost exclusively the #SPXcampaign, which is tailor made for retirement accounts).
For the short strategies such as #Earnings and #ContangoETFs, you will need to use spreads if you want to trade in an IRA. I usually don’t use spreads, but some other contributors on OptionsBistro do, such as @fuzzballl, who uses a mix of naked and spreads.
Let me know if I can help further!
KOLD puts
#ContangoETFs Adding puts at any opportunity (margin free due to short calls).
STO $KOLD Dec 18th 125 put for 3.00
STO $KOLD Dec 18th 128 put for 3.70
SPX iron condor bonus/roll
#SPXcampaign STO $SPX Dec 4th 2015/2035/2125/2145 iron condors for 2.60. Expiring this Friday. Slightly risky due to data coming out this week, but looking for consolidation phase to continue. Will try to be out of this before Friday’s payroll numbers.
SPX spread closed
#SPXcampaign BTC $SPX Dec 11th 2175/2200 call spreads for .10. Sold for 1.35 on Oct 23.
SPX call spread
#SPXcampaign STO $SPX Dec 31st 2175/2200 call spreads for 1.50.
Good morning…
Heavy week of data and reports, including nonfarm payroll on Friday. For #SPXcampaign this week I will be selling spreads in the Dec 31st expiration.
Expirations…
#OptionsExpiration
Expiring with max profit:
$SPX 1920/1895 put spreads
$SPX 1965/1940 put spreads
$VLO 65 & 66 puts
Assignment:
$NXPI 83 & 84 covered calls, stock called away
Have a great weekend everyone!
VLO roll-o
#Rolling Still holding this short stock position, but sale of calls and puts is bringing cost basis up.
BTC $VLO Nov 27th 71 call for 1.95, rolled to Dec 4th 71.5 call for 2.06
BTC $VLO Nov 27th 72 call for .96, rolled to Dec 4th 73 call for 1.13
SPX spreads closing
#SPXcampaign – Not much movement in the index, but theta decay is moving nicely…
BTC $SPX Dec 11th 2165/2190 call spreads for .20. Sold for 1.25 on Nov 10th.
BTC $SPX Dec 4th 1950/1925 put spreads for .20. Sold for 1.25 on Nov 3rd.
SPX spread close
#SPXCampaign BTC $SPX Nov 30th 2145/2170 call spreads for .05. Closed for margin. Sold as part of an iron condor for 2.00 on Nov 9th.
KOLD strikes added
Strikes up to 215 added to January and later. Not selling anymore today, but I will if we continue higher. Looking to load up some puts on every pullback.
SPX iron condor
#SPXcampaign Today I am looking to complete my full position for the Dec 24th expiry, which means I need a spread on each side. Starting with: STO $SPX Dec 24th 2165/2190 call spreads for 1.30.
Then, a few seconds later on a spike down: STO $SPX Dec 24th 1950/1925 put spreads for 1.40.
Done!
Happy Thanksgiving!
Have a great holiday, and thanks to everyone who has made OptionsBistro a success in its first month!
Baking vs. Trading
Slow day in the markets, so this is what I’m up to… making pumpkin pie from scratch! 
UVXY added puts
#VXXGame STO $UVXY Dec 4th 23 puts for .40, adding to the position I started yesterday.
BOIL up
#ContangoETFs STO $BOIL Jan 25 calls for 1.10.
STO $BOIL Jan 30 calls for .50
Any rally in Nat Gas is worth selling
TZA close
#ContangoETFs BTC $TZA Dec 18th 50 calls for .30. Sold for 1.55 on Nov 12th
UVXY puts
#VXXGame Followed Iceman and Kelly, STO $UVXY Dec 4th 23 puts for .40
GMEarnings done
#Earnings BTC $GME Nov 27th 34 puts for .05. Sold for .40 on Friday. Closed the calls for .01 yesterday so this completes the trade.
SPX call spread
#SPXcampaign STO $SPX Dec 24th 2170/2195 call spreads for 1.25, with SPX at 2089. I now have sold one spread in puts and one in calls for the week… need one more of each.
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Thanks! Jeff
KOLD again
It’s 39 degrees in Portland, but KOLD calls heating up again. The new higher strikes give us (hopefully) safe opportunities.
STO $KOLD Dec 200 calls for 3.10
BOIL oh BOIL
#ContangoETFs STO $BOIL Dec 18th 25 calls for .70. Flip side of $KOLD, so margin free.
SPX Dec 17th put spread
#SPXcampaign I only sold one put spread last week so this is the second half of my position for the Dec 17th expiry: STO $SPX Dec 17th 1945/1920 put spreads for 1.35. I got lucky on this one and was filled at the bottom of the day.
KOLD puts
#ContangoETFs Sold these as part of a #ReverseRoll from Friday’s calls, with intent to add more on any down days in the name. These reduce my margin to sell these, since I am heavier in calls than puts.
STO $KOLD Dec 110 puts for 2.40
STO $KOLD Dec 115 put for 3.70
SPX campaign spread
#SPXcampaign Sold $SPX Dec 24th 1935/1910 put spreads for 1.35. First spreads for this expiry… I am not waiting for a strong down move due to the short week that is likely to a quiet trickle up or sideways. Will look to sell call spread as well.
GMEarnings
#Earnings BTC $GME Nov 27th 45 calls for .01. Sold for .40 on Friday. The 34 puts may recover today; order in to close for .05.
Good morning, 11/23/15
Probably a pretty quiet holiday week, which is great for theta decay and one and a half fewer days before weekly expiration this Friday, when markets close early after a full day off. I will be sell Dec 24th credit spreads in the #SPXcampaign. The $GME #Earnings trade looks to be in $2 worth of trouble to start the week… I’ve actually been here before with GME… it usually is a quick trade but one time I took the stock and waited a few weeks with covered calls before turning a good profit. It may take its time to recover but it always has. Have a great week, everyone!
Expirations!
#OptionsExpiration 11/20/15
These expired with max profit:
$BOIL 40 calls
$FL 55 puts
$KOLD 100, 105, 110 puts
$NXPI 75 put
$NXPI 85 covered calls
$UVXY 25 puts
$VLO 67 covered puts
$WSM 57.5/75 strangles
$ZOES 22.5 and 25 puts
$ZSL 63 call
Assignment:
$KOLD 109, 135, 136 calls, stock called away
And this #Earnings one didn’t work…
Long $WMT 55 puts, expiring worthless. Bought for .34 on Monday.
Have a great weekend, all!
Cover up it’s KOLD
#ContangoETFs #ShortCalls Bought $KOLD stock at 144.91 to cover my short calls at 109, 135, and 136. Will look to handle the rolls next week… want to keep margin exposure down over weekend. Thanks @optioniceman for the idea!
Also, BTC $ZSL Nov 20th 60 calls for 2.75. These were sold for effective price of 1.22. Also will look to replace with rolls next week.
CMG dump
What happened to $CMG? Dumped 50 points in last couple hours, down 10% on day.
GME earnings strangle
#Earnings STO $GME Nov 27th 34/45 strangles for .80 (sides sold separately for .40 each). Over last twelve earnings reports, Biggest FIVE DAY up move: 12.5% , Biggest DOWN move: -14.7% , Average move: 8.2% . So these are the moves you can expect for the 5 days between Monday morning announcement to Friday’s expiration. The trade’s strikes are 12.8% OTM (puts) and 15.4% OTM (calls).
SPLK trade closed
#Earnings BTC $SPLK iron fly Nov 20th 62.50 puts for 1.25… sorry I couldn’t post earlier, but I closed these as stock started dropping. Too bad to have missed early morning exit, but still escaped with decent profit. If you are still holding, either get out when you can or see if there’s an end of day rally. Breakeven on trade will be a few cents under 60.00.
SPLK closed calls
#Earnings #IronButterfly BTC $SPLK 62.5 calls for .30. Now will wait for next bounce to exit short puts cheaply.
SPLK iron fly
#Earnings $SPLK behaving beautifully for the iron fly, heading toward our center strike. Best move would have been to close the short put at the highs, but missed that. Now watching for chance to close both shorts when we can.
NXPI puts
I’m still long this stock from an #Earnings play but selling #CoveredCalls and #ShortPuts against it, bringing cost basis down.
STO $NXPI Dec 4th 75 puts for .80
SPX spread close
#SPXcampaign BTC $SPX Nov 30th 1940/1915 put spreads for .15. Sold as part of a 2.00 iron condor roll on Nov 9th.
Good morning, Expiration Friday 11/20…
Bulls are in charge… $VIX should drop below 16.05 today, which was the level from which our last signal fired (11/11 close, from which we spiked 25% last Friday). This is an indication that the 11/13 warning is more likely a false alarm. Given this, I think we can lower the threat level. Next levels to watch on $SPX would be the most recent peak around 2015, then all-time highs at 2034. A break through either could mean the bulls drive us into year-end. Meantime, #Earnings plays in $FL, $ZOES, and $WSM look solid, and $SPLK iron fly will probably maintain at least a small profit.
SPLK earnings trade
#Earnings STO $SPLK 57.5/62.5/67.5 iron butterflys for 3.65. Risking 1.35 to make a max of 3.50 or so. See my earlier post for further explanation.
KOLD roll
#ContangoETFs On Friday I closed some ITM $KOLD calls to reduce margin in case of another manic Monday. I replaced those with these today:
STO KOLD Dec 18th 120 call for 17.00
STO KOLD Dec 18th 125 call for 14.60
STO KOLD Dec 18th 100 puts for 3.00
STO KOLD Feb 135 call for 18.10
STO KOLD Feb 70 puts for 2.10
WSM earnings strangle
#Earnings STO $WSM Nov 20th 57.5/75 strangles for 1.05. Over last 12 earnings, Biggest UP move: 10.3% , Biggest DOWN move: -12.0% , Average move: 6.0% . These strikes are 12.9% and 13.6% OTM respectively.
SPLK iron butterfly
#Earnings Looking at $SPLK, I see the moves on earnings have been under 5% for the last four reports. Before that, it is higher, so I don’t want to sell naked on it. Instead, I’ll take a low risk bet that it will make another small move. An ATM iron butterfly, 5 points wide, is risking 1.5 to make 3.5. I will wait until end of day to put on the trade, in case I need to move to a different strike, but for now the plan is : Sell 1-62.5 put, buy 1-57.5 put / Sell 1-62.5 call, buy 1-67.5 call. Here are the last 12 reports, 1-day moves:
Aug. 27, 2015 AC -2.27%
May 28, 2015 AC -4.85%
Feb. 26, 2015 AC -3.33%
Nov. 20, 2014 AC 3.06%
Aug. 28, 2014 AC 19.07%
May 29, 2014 AC -16.34%
Feb. 27, 2014 AC -2.87%
Nov. 21, 2013 AC 22.80%
Aug. 29, 2013 AC 12.85%
May 30, 2013 AC 3.40%
Feb. 28, 2013 AC 7.86%
Nov. 29, 2012 AC 0.73%
SQUARE
#LongStock #IPO Bought shares of $SQ for 11.85. Never traded on an IPO day, but just seeing of this will take a bull run. Out by end of day.
FL earnings trade
#Earnings STO $FL Nov 20th 55 puts for .60. Over last 12 earnings, Biggest UP move: 8.8% , Biggest DOWN move: -7.1% , Average move: 4.2% . This trade is 10.0% OTM.
BBY earnings trade
#Earnings BTC $BBY Nov 20th 27 puts for .06. Sold yesterday for .32 avg price.
SPX put spread
#SPXcampaign STO $SPX Dec 17th 1925/1900 put spreads for 1.30. Thursday is a bit late to sell the first put spread, but that’s what you get with a rip-roaring bullish week.
Good morning….
Futures were up, but now negative, so perhaps we’ve reached a consolidation area… but be leery of strong moves in either direction as action has been bullish, but a downside warning is still in effect from Friday. (In my backtesting, the correction low of $SPX can be anywhere between 1 day and 1 month after the first warning). I will look to sell Dec 17th put spreads near the open. Meanwhile, we can search for earnings trades in $ADSK, $FL, $GPS, $INTU, $ROST, $SPLK, $WDAY, $WSM. Trade smart!
SPX puts close
#SPXcampaign BTC $SPX Nov 20th 2010/1985 put spreads for .10. This was trading over 7.00 last Friday. Sold for 2.15 on Nov 9th.
Would normally allow these to expire, but with monthly expiration and Friday morning settlement, I won’t leave the risk out there.
NUGT roll
#ContangoETFs #ReverseRoll Continuing to back out my small but ill-advised put positions.
BTC $NUGT Dec 18th 22 put for 2.50. Sold for 1.00 on Oct 16th
STO $NUGT Jan 15th 34 call for 2.70.
SPX call spread
#SPXcampaign Selling another call spread as part of the rolls I need from last week’s stops. This is pretty far above all-time highs.
STO $SPX Dec 24th 2180/2205 call spreads for 1.30.
SPX closing spread at 80%
#SPXcampaign
BTC $SPX Nov 27th 1915/1890 put spreads for .20. Sold for 1.25 on Oct 26th.
ContangoETFs
I’m prepping a webinar for #ContangoETFs and just built this chart. Thought I’d share it with you since it’s an example of the kind of predictable behavior you can see in ETFs like $DUST, $NUGT, $UVXY, $ZSL, $TZA, $BOIL, $KOLD. Kind of like finding money on the sidewalk…
ZOES earnings trade
#Earnings This one is a bit riskier since it is fairly new with only 6 previous earnings reports. Still, the options are pretty far OTM and lower than the stock has been since its IPO month; stock is cheap if assigned.
PLUS, earnings are after tomorrow’s close, so only entering partial today. Will update tomorrow.
STO $ZOES Nov 20th 25 puts for .50, and 22.5 puts for .25.
Biggest UP move: 7.5% , Biggest DOWN move: -4.6% , Average move: 4.6% . These strikes are 20.5% and 28.4% OTM respectively.
BBY Earnings trade
#Earnings Sold to Open $BBY Nov 20th 27 puts for .30 and .32. Scaling in to full position as stock drops off its highs. Next order is in for .34. Not enough premium in calls to make a strangle.
Over last 12 earnings reports: Biggest UP move: 13.2% , Biggest DOWN move: -13.0% , Average move: 6.9% . This trade is 13.3% OTM.
