Reading posts a lot of us are under water on a lot of tickers. Out on a bike ride I had a thought. Obviously selling below the cost basis a snap back rally you then lock in your losses if assigned.
I have been saying it for a while but have yet to do it, sell ATM call credit spreads. Bring in a little income, if the market rockets upward you are long stock, short an equal # of calls, but then have the same number of calls long or any ratio you choose. No cap to the upside.
Personally I am going to do this on my TQQQ trades with the next roll. Roll down right to ATM and then be long net calls for free.
Probably not the best to do these with weeklies, I would go out 30-90 days to give them some room. Then if you want back in the stock, let your long calls exercise.
As for my losing put #fuzzy, duh on my part, I should be selling CCS spreads all the way down. We reverse and I will back ratio them. The problem is I always do it too late. From now on if I sell a delta 20-30 and it reaches delta 30-50, that is the point I will back ratio and hopefully get a directional kick. If nothing else at least reduce the max loss.
Thoughts? Other ideas?
Hi Everyone! Hope you’ve had a good week! This has been a rest and reset week for me. Ditching #Saf-T trades and back to #AtomicFuzzy for me. The atomics are good for higher vol environments. When vol drops back down below 13-14, then regular fuzzy will work.
Just wanted to pop in and say today will bring 2-of-5 1-standard deviation moves up. Looking for that 3rd. The last signal we got was May 10 and about a 95 pt rally ensued. Mon/Tue/Wed are all candidates for a signal.
MU: I took $4200 profit on a covered LEAP #Fuzzy. One thing I know about MU is it has always provided good re-entry points (pull backs) after rallies.
MSFT: Rolled #AtomicFuzzy covered calls from May 25 to June 8, 100’s, collected $470 on roll
ISRG: Rolled LEAP fuzzy covered call from May 25 480 to June 1 465, collected $380 on roll
SPY x 3: Closed May 23 Jade Lizards for 50%, collected $991
SBUX: Added short backratio yesterday on news that non-paying guests are now free to displace paying guests, at shareholder expense. July 4×2 put backratio (60/57.5). I’d like to add to this or ladder in a longer expiration.
RHT: Added Dec bullish covered backratio: 150 c x8 + 160c -6, short 165 c x2 @1.50
ADBE: Added Oct bullish covered backratio: 230 c x10 + 240 c -5, short June 1 245 call -5 @2.14
March 12 #Fuzzy Land
Very excellent day here. All of the unhedged #Fuzzy that I opened on Friday were closed today for over 50% profit–and I pretty much had a lot of them. Q’s were reset and again closed for a lot of profit. Closed Fuzzies for the quarter now have a 47 handle! I’m still shooting to regain that 50 that I had in January.
Opened some new unhedged Fuzzies today in SPY, but when I saw resistance and rising VIX I atomicized them. Here is an example:
SPY #AtomicFuzzy April Expiration: 280c/-280p/277p @ 2.93 x 21 contracts, 284/288 Call credit spread @ .92 x 36 contracts.
I’m flat on Q’s right now, they are showing signs of trend exhaustion right now, so I’ll be patient for the right entry.
Mar 11 #Fuzzy Land + how to make $700 the easy way
Hi Bistro Buds! Last week was a bit of a roller coaster huh? On Thur, before NFP, some technical health indicators I use looked a bit weak. So I took profits on all the index #AtomicFuzzy hedges and closed 1/2 of the core positions. Little did I know what a smart move that was. Remember the Atomics have a double size hedge, so the double hedge covered all the losses on the 1/2 core, then set up the remainder cores for the big move up on Friday. I got lucky, but I try to only get lucky once, then it goes in the tool box for future intentional moves. I realized what an important trade the Atomics are for high volatility, however because they are more expensive, the profit targets need to be tighter. The double hedge in the Atomics accommodates higher volatility, but when profits appear, they need to be taken quickly since profits will appear in declining volatility–which affects the protective legs of Fuzzies.
Friday I took off almost all of the Atomics, and replaced them with regular unhedged #Fuzzies that are free to fly in a “risk on” environment. The price of April Fuzz’s has come down by over 30%. Indexes are my focus. I also took the opp, in a still-elevated vol environment, to put on some of my favorite 20DTE 25/23 delta SPX bitties.
We received our very first 1-Standard Deviation up move on Friday since the big down moves aged off. I think everything is looking rosy. I’ll be watching carefully for follow through early this week on market activity. The closed Fuzzies for the quarter has a 5-figure 35 handle now.
Oh I almost forgot….”How to Make $700 Easy”…. On Monday after hours when the market tanked on the Cohn announcement, I bought TEN TEENSY shares of AMZN. I thought it was ridiculous….how could 10 tiny shares help me in any way? Well…you know the answer to that now. This is going in the toolkit.
Good trading this week for everyone!
First positive week since the SVXY melt down Feb 5-6, 2018, so that is a good thing. I think the bleeding finally stopped, only 1 more contract I can be assigned on at any time.
If I can keep making the same amount each week (unlikely) only 33.3 weeks to get back to all time highs but about half that to get to even (cost basis). What I lost was mostly house money but it was enough to buy a real house 😦 ouch!!
LNG rolled this week 54 CC to 2 week 55 for 0.45 credit. Cost basis now 54.2 after being assigned the 55.5 put last week. Next roll down should result in a profit anywhere around 54.
Unless a major move tomorrow I expect to be called out on (hopefully there are no stupid tweets!)
FAS 66, 67, 68 CC
MAR at 138
NSC at 140
GM 42.5 put. Taking stock, can’t roll it anymore for a credit so will take it and sell CC. Missed the dividend, I think it is today.
Have finally finished taxes and full year review. Based on what won and what lost going forward my trading plan is contracting dramatically to only 4-5 trading tactics.
2. #spycraft and credit spreads with the new adjustment technique
3. #fuzzy and maybe try a few #atomicfuzzy
4. put ladders with fuzzy adjustments if they go the wrong way
5. VXX put debit spreads after volatility spikes
Everything else worked until it didn’t and either was flat but required lots of trades or worked really well until it blew up. Goal is to recover what I lost, then keep weekly income coming in, and most importantly do not lose any money again!
Hope everyone has a good close to the week, too busy tomorrow to check in.
March 2 #Fuzzy Land: Self Assignment
Hi Bistro Friends! I did a #SelfAssignment on MSFT today, converting naked puts into an #AtomicFuzzy. I really like selling 3-4DTE naked puts on MSFT on dips. Been doing it for 18 months it seems, with assignment always assumed but never realized. Today finally was the first chance for assignment. So I chose to do self-assignment into an #atomicfuzzy.
Original trade: STO MSFT Mar 2 94 puts for .72 closed for 1.90, loss: $1118
Atomic Fuzzy: BTO MSFT Apr 92.5/92.5/90 x10 w/ 95/97.5 Call spread for -.80 x24
A move to 94 can get me back to even with a fraction of the risk vs. taking stock assignment. There’s a hockey-stick graph above that for gains.
Atomics have become a big focus for me. I partitioned funds last week for a “hedge fund” type approach to them. Timing may be off a bit…but serious testing is in progress. I haven’t said much about this, but I think there is a ton of edge in these trades….just working on proving it out now. Even though they have nice risk control, they still need a rising market for performance. So, just laying in wait now for that to happen. I was able to take a lot of profits on previous Atomics last week. The CLOSED fuzzy profit for the quarter is now $32,994. But, I’m under water on my newest fuzzies. I was able to use #FuzzyBear trades this week to gain a few k’s.
I had a bit of an epiphany this week regarding a previous post I did that showed we need 3-of-5 one standard deviation up moves before a rally can be trusted. I’ve been watching every single day for even a 1 standard deviation up move and we haven’t had it. I realized that the huge SD down moves tamp down any further SD’s until they age off the averaging. So there’s a coincidental relationship between what I thought was 3 1-SD up moves and the big SD down moves aging off. What I thought was a wait for 3 1SD up moves was probably actually a wait for the big SD to age off, which gives it time to retest lows while waiting. Anyway….if any of this makes sense to you, welcome to my brain. The big SD down moves age off my system in the next 2 trading days. Then there should be more realistic SD data to evaluate.
Have a great weekend everyone!