IRBT Falling Knife

Post earnings sold Nov 15 55 puts @ 1.40. Stock currently at 73.64.
Thanks for the heads up on this one MikeL/@az947.

#hedge Still raining here and…

#hedge

Still raining here and the VIX is down to 11.82. Cheapest time to put on a portfolio hedge. I fully expect these to expire and lose all my $ but 1-2 times a year it may be a lottery ticket! This is based on the recommendation from option income masters (a subset of OIB). They hedge the entire portfolio almost monthly, after a big drop they cash out and put the money back in at the bottom. They finance the hedges by selling other options.

I am only hedging my core account, everything else already spreads or cash hedged so BTO 2 SPX 2550 puts 35 DTE. In a 10% correction these should be worth 11-12k which would offset the losses on the account in a 10% correction and then could close for cash to redeploy.

Hope I don’t need it but will see how it works.

@geewhiz112 Are you still holding…

@geewhiz112

Are you still holding your position in CLF?

Your previous post was for :

#longcalls
$CLF BTO 7/20 10 calls at .44 and sold twice as many
#shortputs
$CLF STO 7/20 8 puts at .17

June 15 Trades

Happy Friday Everyone!
I didn’t have a ton going, ‘cept for one big thing. That later.
IWM: #Saf-T 1000 shares called, net profit $1200. Reset 1500 @ 167.66, 14x jul 27 166 puts @ 2.10, Jun 22 168.5 calls x13 @ .70

I was squirming bad this morning with a ton of SPY shares on and no short calls against them. Luckily the market rebounded, I got some short calls for next Wednesday in the book. I can sleep at night when I know my short calls are on. I’m not kidding when I say it felt really uncomfortable not having them. I will change this strategy next quarter so that calls are always on regardless of dividends.

BA…ugly, but I’m not too concerned. Got lots of hedges on, got a put diagonal kicker, so far it’s looking like a retracement. Maybe even the handle of a cup forming.

Ok…beware when @kathycon MamaCash and I open the lab. We can stay up all night online battering trade designs about and running backtests. We are ALWAYS taking established designs, or other people’s ideas, and reworking them for the best success rates, highest profits, lowest risk.

We reworked the dates and ratios on #Undies last night. I think you should let us test these out a bit. But what we discovered by backtesting is that a 30day long with a 14 day short in a .66 ratio (3×2, 6×4, 20×13) yields a much higher return on margin than using the longer dates. Because the 30-day longs are cheaper, there is less risk, which directly affects the return. These trades go on with a slight positive gamma, slight negative theta, positive vega…so kind of nice greeks on these. All of the 1-year returns we are looking at are really high, like 300% to 1200% (return on margin risk).

Consider these “petri dish” trades right now…we’ll run ’em down and report on effectiveness.

Between the two of us we have a lot of 3×2 tests on now in NVDA, ADBE, BABA, NFLX…and some others. We will report on the effectiveness of this.

Here is an example of one I have on BABA: Jul 13 202.5 call 3x @ 9.20/Jun 29 210 call 2x @ 3.40.

Everyone have a safe weekend!

Sue

p.s. premium collection this week was $14,811, 90% of what I sold. Good week!

#fundie

ETF Dividends Next Week

Don’t forget about dividends next week if you are rolling any calls on ETF’s. Remember the div rule on call assignments: The div has to be more than the extrinsic value for your position to be vulnerable. IF you are assigned for the dividend, you also are PAYING the dividend to the new share holder, if you didn’t know.