Closed DVN Put / Rolled CBOE Covered Call / Rolled SQ Covered Call

#closed early
$DVN BTC 3/23 33 put at 1.25 STO at 2.45.

$CBOE BTC 4/13 122 call STO 4/20 123 call at .20 added credit. Stock basis now 118
$SQ BTC 4/6 53.5 call STO 4/20 58 call at 1.70 debit. Rolled this one several times. Now cost me 2.00 but assignment price raised from 45 to 58. Stock now at 58.18. Rolling is dizzying. Don’t know how @fuzzballl does it so often. Must be his pilot training.

More thoughts on SVXY #vxxgame….

More thoughts on SVXY #vxxgame.

I closed out all the SVXY stock I was assigned on yesterday because with the new structure, I just don’t see it taking off like it used to even when back in contango. With the VIX down exactly 0.96 this morning, SVXY only up 0.07 or so. The big gains we were seeing before Feb were from years of accumulated contango. Looks like we will have some 2 sided markets for a while and that hopefully will keep the VIX higher, good for selling options as @fuzzballl pointed out yesterday.

Still reading the new Sebastain book but have already picked up a few pointers from the market maker side. Only be long volatility for short periods of time. Do not be short unhedged volatility (see SVXY and XIV implosion), buying puts on VXX long term has shown good risk adjusted returns. However, I would take that 1 step further and suggest buying VXX put spreads, especially after spikes. Looking at 17 DTE VXX put spread, buy the 45, sell the 40 costs 2.86 at current prices for 5 dollar max profit or roughly 1:1 profit to loss ratio. I don’t have the cash or margin at the moment, but will be looking to use some of these as we go forward. You could even go ITM for less risk and still come out ahead.

Rest of the week just sitting on my hands letting theta do it’s thing. Have a good week!

Closed Early / Short Calls

Closed Early on GTC Orders
$SPX BTC 3/9 2800/2775 BECS @ 2.00 STO at 6.00
$SPX BTC 3/16 2875/2850 BECS @ .30 STO at 1.80 Thank You @jeffcp66
$NVDA BTC 3/16 270/260 BECS at .80 STO at 2.30
$NKTR BTC 3/2 75 put at .30 Sold for 4.70. Earnings AH today. Earnings were good but only cost me .30. Thanks to @fuzzballl and @jdietz1954 for the idea.

$MTN STO 3/16 210 call at 3.60
$SQ Rolled BTC 3/2 46 call STO 3/16 48 call Two dollars up and additional .40 credit

SPX Campaign / Long SVXY…

SPX Campaign / Long SVXY Calls / Short Puts AMZN / AZO Earnings Strangle / Close Early SQ Calls /

$SPX STO 3/2 2700/2725 BUPS at 3.00 Thank you @jeffcp66
$SPX STO 3/9 2775/2800 BUPS at 17.00 Thank you @jeffcp66

$SVXY BTO 1/17/2020 16 calls at 5.30 Thank you @fuzzballl

$AMZN STO 3/16 1420/1440 BUPS at 2.85

#shortstrangles (Earnings)
$AZO STO 3/2 660/790 at 6.40 Thank you @jeffcp66

Closed Early (partial position due to earnings tomorrow)
$SQ STC 3/16 40 call at 6.85 BTO at 2.80
$SQ STC 3/16 46 call at 3.00 BTO 11/15 at 5.50 (Should have closed them all)


After calculating over the weekend where this particular account stands my stock basis turned out to be 48.82. These were all synthetic stock positions that were hedged with disaster puts so all said and done the damage wasn’t horrible. I’ve since sold all the stock at 12.90.

After playing with the numbers to go synthetic, it actually works out a little better and less complicated just to buy the calls. This first purchase is equal to the stock size. I’ll add to it on any pullbacks since I’m willing to risk a little more by going double the stock size.

Bought SVXY JAN 17 2020 15.0 Calls @ 5.65

I am planning to try to sell safe calls against these to reduce overall risk. The goal will be for the profit in these to equal the stock loss and at that point decide how much longer to hold. This position is in an IRA and it’s still sitting on one last 80/80/77.5 synthetic that if exercised would lower my cost basis slightly.

I’ve got SVXY in my main account also and was much better hedged. Basis there is 30.00 with one Jan 2019 25 put still outstanding. Planning on a call buy in that account also.

My worst position is a smaller account that was unfortunately “SVXY only”. Had nothing but laddered naked puts in it. Basis there is 97.70. Still holding stock covered by 11.50 short calls. Waiting to see how those play out before adding long calls to that account.

Hey @fuzzballl what do you…

Hey @fuzzballl what do you think about bi-directional #fuzzies on range bound names?

I was looking at some of my recovery trades and this may work. Buy LEAPs calls and puts, and sell weekly straddles/strangles against them. You can leave the original longs on, then just move the straddles and strangles around depending on how it moves. On most names could take in $2-4 credits per week.

Would not really need a hedge because you are long the put as well as the call but there may be a margin requirement if your strikes don’t line up after a while. Looking at 1 year leaps it would probably work. 2 years would take a few weeks just to break even. Here is a WDC example using Jan 19 leaps. I used to do this with multi -strike calendars and it was hugely successful until it just stopped working (once the VIX stayed below 15). However, it benefits from increasing VIX.


STMP earnings

#Earnings Got put the stock last quarter so was going to skip it, but then saw @fuzzballl‘s trade and couldn’t resist. Going 10-pts lower than he did.

Sold $STMP Feb 23rd 150/230 #ShortStrangles for 2.30.
Biggest UP move: 38.1%, Biggest DOWN move: -22.6%, Average move: 17.1%. My strikes are +23.0% and -19.8% OTM.