Rolled IWM Jul13 166.5c to Jul20 170.5c @ .82 debit.
Another case of getting run over since Friday. These are ratio trades so still making money but not much.
Author Archives: MamaCash
DIA short calls
Sold Jul13 245c @ 1.61 on Friday. Covered today @ 2.65 because it ran out of extrinsic.
Replaced short call with BeCS DIA Jul20 251/249 @ .58.
While we’re in rally mode, I’m switching from 45 delta short calls on my ratio trades to 35/21 BeCS. I want a hedge but not so tight that it cuts off profits.
#shortcalls
#unbalanceddiagonal
JPM pre earnings
Sold JPM Jul20 106c @ 2.10 x4. Bot in layers for avg price of 1.40.
Still holding JPM fuzzy Jul20 105c/105p/102p 1/-1/1 @ .70. Current price 2.03
#earningsrunup
NFLX pre earnings
Bot NFLX Jul20 420c @ 10.04. Sold @ 20.00
Will open new position on any significant pullback before earnings report on 7/16.
#earningsrunup
Introducing VXXB
https://basicsoftradingstocks.wordpress.com/2018/01/22/vxx-etn-changing-to-vxxb/
Mining for cash in the ratio trades
With the rally today, many of my long calls moved up to the 75-80 delta range. I took advantage of this bounty and rolled these long calls back to 63 delta in the same expiry. This allowed me to raise appx $5000 in cash while keeping the ratio trade design in tact. I would list all the trades but this has been a long week. If questions, please ask.
SSO
Thank goodness for the ratio trades because otherwise, my SSO short calls would be wiping out my profits today.
Rolled Jul13 111.5c to Jul20 116c for 2.53 debit
Rolled Jul13 112.5c to Jul20 116c for 1.72 debit
Rolled SSO long call Sep21 110c to Sep21 112c @ 1.53 credit (resetting to 63 delta)
Volatility and SPX rallies
I trade VIX and VXX based on extremes I see in the price channels. I’ll start by sharing a few trades and more on strategy later.
Closed trades
STO VXX Jul13 38/39 BeCS @ .38 x 10. Bot back @ .10
Bot VIX Jul11 16P @ 1.62. Sold @ 2.02 x2
Bot VIX Jul11 15P @ .90. Sold @ 1.15 x2
Bot VXX Jul13 35P @ 1.02. Sold @ 1.45
Open trades
Rolled VIX Jul18 15/20 BuCS bot @ 1.12 to create a Jul18 15/13 BeCS for 1.90 credit – directional bias changed
Bot SPX Jul9 2780c @ 1.75 x2 in anticipation of the rally continuing thru today and perhaps Monday.
LMT earnings report
Unfortunately, LMT moved their earnings report date from 7/17 to 7/24. This means that our Jul20 trades are not positioned to capture the high point of earnings momentum. My recommendation is roll them out to Jul27 expiry for a loss or close them. I haven’t seen earnings reports get moved around like this until the last couple quarters. This is the risk that comes with these trades.
PANW RHT
Rolled RHT Jul6 135c to Jul13 137c for .30 credit
Rolled PANW Jul6 205c to 207.5c for .50 credit
This takes care of all my Jul6 ITM short calls.
FAS roll
Rolled FAS Jul6 63c to Jul13 64c for .35 credit.
The ITM short calls in the Jul6 expiry are hitting me in the face today but profit is good so won’t complain.:-)
#unbalanceddiagonal
#shortcalls
TWTR short call
Rolled the Jul6 44.5c to Jul6 45.5c for .20 credit. This 2×1 ratio trade has been profitable since entry.
#unbalanceddiagonal
#shortcalls
NFLX supercharger
Sold NFLX Jul6 380/385 @ 4.70. Bot @ 4.39.
I didn’t manage this trade well. Adjusted from 10-wide spread to a 5-wide spread at the low giving up $2 potential profit.
XLY rolled short call
BTC XLY Jul6 109.5 @ .20, Sold @ .91
STO XLY Jul13 109.5 @ .71
Pre-earnings second layer
With pre-earnings, I recommend to use small position size and add layers on pullbacks. I’m adding to LMT and INFY today on the pullback. This is my own refinement of the CMLViz strategy. CML goes all in on the first trade. At 7 days before earnings, they use a 40% profit/loss stop.
Bot LMT Jul20 310c @ 1.30
Bot INFY Jul20 20c @ .29
#earningsrunup
IWM PYPL TQQQ rolling short calls
Rolled IWM Jul6 165c to Jul13 166.5c @ .90 credit
Rolled PYPL Jul6 83c to Jul 13 84.5c @ .97 credit
Rolled TQQQ Jul 58.5c to Jul13 58.5c @ 2.41 credit
#unbalanceddiagonal
#shortcalls
DIA and SSO
BTC DIA Jul13 245c @ .20. Sold @ 1.61
STO DIA Jul13 242.5c @ 1.97
BTC SSO Jul6 113c @ .20. Sold @ 1.18
STO SSO Jul13 111.5c @ 1.46
Core long positions lost the ground they gained yesterday but nice to collect and keep some premium.
#shortcalls
#unbalanceddiagonal
MU short calls
BTC Jul6 53.5c @ .20. Sold @ 1.24
STO Jul13 51.5c @ 1.40
Things are getting sloggy going into the close.
#shortcalls
#unbalanceddiagonal
LMT pre-earnings
Bot Jul20 310c @ 1.94.
GTC order to sell at 80% profit or will sell the day before the earnings report whichever comes first.
LMT has had a rough patch the last couple months so it may be riskier than usual to take a pre-earnings momentum trade. However, it has the best CML study results of all the pre-ER trades I’m following. Excellent returns on entering trades 14 days, 7 days, or 3 days (any day for that matter) before the report. All study results are based on exiting the trade before the report. There is no earnings risk on these trades.
DIA short calls
Rolled DIA Jul6 242c to Jul13 245c for .76 debit. Short call had no more extrinsic value and this gives me another $3 of breathing room for next week.
NFLX pre-earnings
Yesterday, I bought two NFLX calls to play the runup into earnings. The 20 delta call sold at target this morning.
STC NFLX Jul20 440c @ 7.40. Bot @ 5.30.
ASML Pre-Earnings
BTO ASML Jul20 200c @ 3.80. Will sell @ 50% profit or day before earnings report on 7/18.
#earningsrunup
JPM Pre-Earnings
BTO JPM Jul20 106c @ 1.50. Will close @ 50% profit or day before earnings report on 7/13
#earningsrunup
NFLX Pre-Earnings trades
BTO NFLX Jul20 420c @ 10.04. GTC order to close @ 20.00
BTO NFLX Jul20 440c @ 5.30. GTC order @ 7.40
Confirmed earnings report 7/16. This trade is based on a historical momentum pattern going into earnings. 100% win rate for the last four quarters.
#earningsrunup
XLY short call roll
BTC XLY Jul6 110.5 @ .10. Bot at .64.
STO XLY Jul13 109.5c @ .75 to replace. Let the good times roll.
#shortcalls
Taking advantage of the bounce
Cleaning out some duds and resetting on the bounce.
DIA, FAS, IWM, SSO, TQQQ, XLY income trades
Reset ETF unbalanced diagonals to Aug or Sept 63 delta long calls, Jul6 45 delta short calls, 3×2 ratio, will roll short call @ .20 or when at risk of assignment, reset when core has less than 30dte
MRVL, PANW, PYPL, RHT, TWTR income trades
Reset stock unbalanced diagonals to July 27 or Aug 63 delta long calls, Jul6 45 delta short calls, 2×1 ratio, will roll short call @ .20 or when at risk of assignment, reset when core has less than 30dte
AMZN, GOOGL, ISRG, MSFT, and NFLX earnings trades
Bought BuCS or long calls one expiration past earnings. Typical long call is 40 delta or BuCS with 40 delta long call and short call 10 to 20 points away. I use the BuCS trade when calls are expensive and risky (AMZN for example)
ADBE, BA, BIDU, FB, LABU, MSFT, NVDA, and TNA Fundies (fast unbalanced diagonals)
Closed all my fundies after exhausting all reasonable possibilities of recovering losses with short calls. I didn’t open new trades on these tickers. I want a much smaller book of trades to manage going forward. Although fundies do well on a backtest, the drawdown during a choppy period adds too much risk for my taste. This trade will be left in its Petri dish by the side of the road.:-)
If anyone is interested in the trade specifics, please let me know and I’ll share.
Mama Cash Trading Saga
It wasn’t my intention but I ended up with an impressive collection of falling knives today: AMZN, GOOGL, LABU, NFLX, NVDA, PANW – all beautiful trades from last week that didn’t fare so well today. In the win column, I covered the full debit paid for my SSO unbalanced diagonals by collecting four rounds of premium. This is a first for me so I’m declaring a small victory on a tough day.
RHT falling knife
I lost a significant amount of money on a pre-ER trade in RHT. I opened an Unbalanced Diagonal to try to claw my way back to profit. The chart looks really broken so taking a risk here but hoping to collect some income along the way.
BTO Jul27 140c x3, STO Jun29 146c x2 @ 20.95
#unbalanceddiagonal
Back in fuzzy land
I’ve been eyeing the LABU chart as many of you trade it. Decided to dip my toe in with a fuzzy because I can more easily limit my risk.
BTO LABU Jul20 110c/110p/107p (1,-1,1) @ 6.20. Sold Jun29 115c @ 2.15.
#fuzzy
Mama Cash summer kickoff
On pullback, added Fundies in FB, PANW, SSO, TNA, TQQQ, XLY. Jul20/Jul6 3×2, 63/45 dte.
Converted BA and DIA from unbalanced long diagonals to bear call spreads. Charts are broken. Attempting to get back to even.
ILMN Supercharger closed for profit. STC ILMN Jun22 275/280 BuCS @ 4.70 (2). Bot @ 3.91
#fundie
#unbalanceddiagonal
#supercharger
AMZN supercharger closed for profit
BTO AMZN Jun22 1682.5/1692.5 BuCS @ 7.83. STC @ 9.40
STO AMZN Jun22 1682.5/1682.5 BuPS @ 2.20. BTC @ .40
For the record, the call side closed first by about two minutes.:-)
TNA Fundie Closed
BTO TNA Jul13 86.5c @ 4.33, STC @ 5.75 x3
STO TNA Jun28 89c @ 2.08, BTC @ 3.15 x2
Profit: 12%, $105
Calculated gross profit rather than net. Now updated with correct amount. Thanks @fuzzball.
Pre-Earnings Momentum
One of my favorite strategies is to buy calls ahead of earnings to capture profits from the almost inevitable price momentum and vol expansion of high-flyer stocks. The key to success is to close these trades before the report to avoid post-earnings risk. I use CMLViz to backtest and only take trades with a high probability of winning AND an even distribution of trade profits over multiple quarters. GOOGL and NFLX are among my favorites along with ADBE, BA, MSFT and others.
BOT +1 GOOGL 27 JUL 18 1230/1260 CALL @6.80. GTC order to close for 40% profit @ 9.50. Earnings 7/23
BOT +1 NFLX JUL 18 415/435 CALL @5.77. GTC order to close for 40% profit @ 8.08. Earnings 7/16
GOOGL trade closed for 40% profit at 9.50 in less than 24 hours. Jumping in for another round.:-)
NFLX trade closed for 40% profit @ 8.08 in less than 24 hours. Jumping in for another round of Jul20, long strike 20d.
If trades close for profit quickly, I’ll do multiple rounds on the same underlying in the same quarter.
#Pre Earnings Momentum
Going long on the pullback
WYNN at key support from Mar 28. Expect short sellers to get squeezed.
BTO Jul13 177.5/192.5 BuCS @ 4.20. STO 172.5/167.5 BuPS @ 1.51
TSLA reaching for $400 and won’t stop
BTO Jul13 380/400 BuCS @ 4.90. STO Jul13 337.5/332.5 BuPS @ 1.37
ISRG tight consolidation pattern from June 5. And I love this stock.:-)
BTO Jul20 490/505 BuCS @ 6.74. STO Jul20 477.5/472.5 BuPS @ 1.65
#longcalls
BA SupaCha Eject
Defense stocks have taken a huge hit in the last couple days. Rather than trying to save the BA SupaCha box trade, I’m going to eject as Whiz would say. It isn’t cost effective to adjust by selling a call credit spread and buying a put debit spread nor prudent to double down.
#supercharger
CRM for a quick profit
I bot an unbalanced diagonal on CRM a couple days ago for a longer hold but it hit a profit decision point today so decided to TTMAR. It triggered a daily squeeze 8 days ago and extrinsic on the short calls was all but gone. Nice problem to have.
Bot CRM Jul18 130c (5), Sold Jun22 135c (3) @ 27.08. Sold @ 35.83.
#unbalanceddiagonal
AMZN Box SupaCha
BTO Jun22 1682.5/1692.5 (1) @ 7.83. GTC order to sell at 9.40.
STO Jun22 1692.5/1682.5 (1) @ 2.20. GTC order to buy @ .40
#supercharger
NFLX winner announced
When I posted my NFLX supercharger box trade, I was testing to see whether call debit spread or put credit spread would hit profit first. Well, both horses crossed the finish line and the puts won by appx 30 minutes.:-)
Bot NFLX Jun22 352.5/357.5 x2 BuCS @ 3.86. Sold @ 4.70
Sold NFLX Jun22 357.5/352.5 x2 BuPS @ 1.30. Bot back @ .34
The puts not only won the race in terms of time. They also brought in .02 more profit. I’ll be doing more box superchargers and possibly going with more credit spreads than debit spreads.
#supercharger
PYPL team effort
@smasty160 and I teamed up to pick a financial stock to add to our unbalanced diagonal portfolio. Here’s my PYPL trade:
Bot PYPL Aug17 82.5c @ 6.09 x5, Sold Jun22 86.5 @.81 x4 for $2720 total.
#unbalanceddiagonal
ADBE
Supercharger closed for target profit in spite of earnings tomorrow. Whew! Bot position in two layers.
Bot ADBE Jun15 237.5/242.5 BuCS x2 @ 3.99. Sold @ 4.70
Bot ADBE Jun15 237.5/242.5 BuCS x2 @ 3.30. Sold @ 4.70
WDAY 3×2 #unbalanceddiagonal Want more…
#unbalanceddiagonal WDAY 3×2
Want some exposure to financial services and like WDAY chart. Oops! WDAY is in the software industry/tech sector. Thanks, @smasty160
WDAY 3×2 +Jul27 124/-Jun22 128 call ratio @ 17.20
BA Box #supercharger Opening a…
#supercharger BA Box debit and credit spreads
Opening a BA box supercharger on today’s pullback. Support at 360 based 21 daily ema.
BTO BA Jun22 355/360 call spread @ 3.65. GTC order to sell @ 4.70
STO BA Jun22 360/355 put spread @ 1.15. GTC order to buy back @ .20
SSO 3×2 ratio call spread
Bot 3/-2 SSO Jul27 115/Jun22 118 call/call @ 11.63
Will transform this into 5×3 ratio on a pullback after fed announcement. This is a nice trade for smaller accounts.
#Unbalanced diagonal ROKU Bot +5/-3…
#Unbalanced diagonal ROKU
Bot +5/-3 ROKU Jul27/Jun22 42/45 Call/Call @ 18.40
#supercharger AMZN Jun15 1660c/1670c debit…
#supercharger
AMZN Jun15 1660c/1670c x2. Bot @ 7.1 and 7.85. Sold @ 9.40. Total profit $405
GOOGL Jun15 1117.5/1122.5c x1. Bot @ 3.59. Sold @ 4.70. Total profit $101
GOOGL Jun15 1120/1125 x2. Bot @ 3.61 and 3.96. Sold @ 4.70. Total Profit $183
NFLX #supercharger Opened Jun22 352.5/357.5c…
NFLX #supercharger Opened Jun22 352.5/357.5c @ 3.86 x2
Supercharger lineup
A year ago, I did a couple superchargers on AZO as part of a trading competition. I won the competition which was really cool but then I forgot about them. I didn’t know then that anyone else did them, much less that they had a name. A couple weeks ago @hcgdavis mentioned that he was using superchargers in a small account. When I looked at the setup, I recognized it immediately. After a little research, I decided to make superchargers a staple in my smaller accounts. This setup allows me to trade the high flyers with minimal risk. Last week, several winners closed. No losers yet. Yesterday, BABA, BIDU, and NFLX closed for target profit. I open GTC orders to close these at $2.35 on 2.5 wide spreads, $4.70 on 5w spreads and $9.40 on 10w spreads. Profit varies but it’s typically 20-30%.
Here’s my current lineup of open trades:
ADBE Jun15 237.5c/242.5c @ 3.99×2 and 3.30×2
AMZN Jun15 1660c/1670c @ 7.85×1 and 7.10×1
GOOGL Jun15 1120c/1125c @ 3.96×1 and 3.61×1
GOOGL Jun15 1117.5c/1122.5c @ 3.59×2 (added these on the dip last week)
ISRG Jun15 472.5c/482.5c @7.65×2
ILMN Jun22 275c/280c @ 3.91×2
MSFT Jun22 97.5c/100c @1.91 x2
Thanks for bringing these to my attention, @hcgdavis.
Hello Option Bistro!
After window shopping at Options Bistro for several months, I’ve decided to come inside and talk shop. One of my best days as a trader was the day I discovered the Bistro. I’m so impressed with the creative ways that everyone here makes money. I love how you fight to get back to even no matter how long it takes. My inclination as a trader has been to take my lumps when I have a loser, dump it, and move on. I’ve learned at Bistro that there is a better way.
As to where I fit in the growing Bistro family, I’m Smasty’s (Sue) sidekick. We are on a perpetual hunt for better, stronger, and more profitable trades. She is the options maestro and I’m the wordsmith and caretaker of the petri dishes. She comes up with innovative, sometimes complex trade designs. Together we analyze them, tweak them, name them, and test them with real money. We are relentless mad scientists. We’ve discovered and customized trade designs that work in almost any market conditions.
I’m a trend trader at heart. My approach is to determine the trend (bullish, choppy, or bearish), identify instruments that move with the trend, and use designs that capitalize on the trend. I gravitate to high probability, limited risk trades that allow me to trade another day if the worst-case scenario plays out.
My favorite setups are diagonals, collars, fuzzies, superchargers, calendars, pre-earnings, and long shots. I trade unhinged when I’m really bullish and unbalanced when mildly bullish. Forgive my cheeky sense of humor.:-) Beware my favorites list is subject to change daily. After all, Sue is my trading partner. We never met a trade that couldn’t be improved and we don’t mind leaving our failed petri dishes by the side of the road. Lol.
Thank you, JeffP, for allowing me to be a contributor. It is an honor. I look forward to sharing trades with you and continuing to learn from all of you.
Options Bistro 