Down to .33. Can it go to zero?
Down to .33. Can it go to zero?
If we liked GUSH yesterday, it’s down to .82 today.
#ContangoETFs Bought to Open $GUSH Jan 2021 20 calls for .25. This may never make it back to 20 (a reverse split is probably imminent), but a cheap long shot that I will likely add to at lower strikes and more if there is a split.
#ContangoETFs This was just too much to resist. I need to get back the losses I took by exiting last week.
Sold $DRIP March 20th 335 calls for 27.00.
Unfortunately I’m going to have to dump out of $DRIP short calls. They are my only positions going against me badly, since I have long options hedging my $UVXY and $VXX shorts.
We are poised now to see the worst week in the market since the financial crisis. Even in best case scenarios with corona virus, it’s likely to scare the markets for a few more weeks. What this will do to $XOP is uncertain. But since yesterday’s close we are going to open 4.4% lower. This means DRIP must open (x3) 13.2% higher. So a .70 drop in XOP means at least a $21.00 rise in DRIP.
Frankly, most of my accounts can’t handle it, and I need the margin to sustain and place other positions. I will try to profit from DRIP’s eventual decline, but I’ll have to wait until it’s actually underway. Fortunately, I didn’t go nuts and only have 3 calls on two accounts, and 2 calls in a third account. I kept my smallest accounts out of it completely.
Other than a couple misadventures over the years, one in $KOLD and a couple in $NUGT, the #ContangoETFs strategy provides a pretty smooth income. But these outlier moves are too damaging, so I’m going to cease the naked calls and use diagonals or spreads, like many of have switched to in #VXXGame and many of you are already doing in DRIP.
#ContangoETFs . I am closing $NUGT at breakeven because I think chances are it will still go higher and I don’t want to get into another $DRIP situation right now.
BTC NUGT June 47 calls for 3.75. Sold for 3.80 on Dec 24.
BTC NUGT Sep 52 calls for 4.75. Sold for 4.80 on Feb 21.
#SPX1dte Expiring: $SPX Feb 26th 2970/2990-3220/3240 condors, sold yesterday for 1.30.
I did these a little while ago when DRIP was still under 150. What a crazy move in oil.
Rolled in the money 3/20 125 call up and out to 6/19 155 call (which was out of the money at the time but not anymore) for 1.95 credit.
Sold the new highest strike 3/20 220 call @ 5.00. Obviously you can do quite a bit better now. I have an offer in for another contract above where it’s trading now.
#ContangoETFs Sold $DRIP March 20th 186 calls for 6.35
#ContangoETFs Sold to Open $NUGT Sept 52 calls for 4.80.
#ContangoETFs Following a few folks, filled forthwith: March 20th 184 calls for 3.05.
#ContangoETFs Sold $DRIP June 19th 150 calls for 12.75.
Sold $NUGT 6/19 51 call @ 4.00
#ContangoETFs Sold to Open $NUGT June 19th 47 calls for 3.80 (highest strike). First position in NUGT in awhile.
Also looking at $GUSH, which is reaching 3-month highs.
#ContangoETFs . Just noticed I was filled yesterday:
BTC $DRIP Jan 17th 150 calls for .45. Sold for 4.50 on Dec 3rd.
#ContangoETFs BTC $DRIP Dec 20th 115 calls for .80. Sold for 8.60 on July 23rd.
#ContangoETFs At the highs this morning, Sold $DRIP Jan 17th 150 calls for 4.50.
#ContangoETFs BTC $NUGT Jan 17th 40 call for .25. Sold for 2.10 on March 25th. Not sure if that long wait was worth it. Now flat in NUGT.
#ContangoETFs BTC $NUGT Jan 2020 55 calls for .54. Sold for 3.20 on July 18th.
#BearCallSpreads #ContangoETFs – Had one naked call that got in trouble and wasn’t liking it very much. I rolled it out to 2021 70/80 bear call spreads figuring I’d hide there until things calmed down. Made it a 10 lot to make it worthwhile since the trade was practically a sure thing. Booking it today and will wait for DRIP to rebound when the Saudi oil gets back online.
Bought to Close DRIP JAN 15 2021 70.0/80.0 Bear Call Spreads @ 1.40 (sold for 1.60)
#ContangoETFs. BTC $DRIP Sept 20th 115 calls for .40. Sold for 3.60 on July 25th.
#ContangoETFs Bought to close $DROP Sept 20th 175 call for 2.00. Sold for 6.70 last Wednesday. Take a cue from Ramie and closing these far OTM calls when I can to help chip away at the burden of short 115 calls that have gone ITM a few times.
#ContangoETFs Sold to Open $DRIP Sep 20th 175 calls for 6.70. This should help ease the burden of carrying short 115 calls ITM.
#ContangoETFs Sold to Open $DRIP Sept 130 call for 6.40. Highest strike.
#ContangoETFs – Oil imploding but DRIP still below yesterday’s high. That’s how it’s supposed to work!
Sold $DRIP 12/20 115 call @ 10.00 (adding to position)
Sold $DRIP 9/20 115 call @ 3.50
Some new strikes opened up so I’m getting one on the books. Sold $DRIP Dec 115 call @ 8.50. 115 is now the highest strike.
#ContangoETFs I don’t want to get caught deeply OTM that really hammered me in 2016 with NUGT’s 100-point run higher. So I’m rolling strikes that get breached. For today, closed them on the pullback and will consider how to roll in coming days.
BTC $NUGT Sep 20th 35 calls for 5.00. Sold for 2.06 on Jan 31st.
BTC $NUGT Dec 20th 35 calls for 7.35. Sold for 2.95 on June 20th.
#ContangoETFs Keeps notching new highs. No strikes breached yet but it could get ugly before it gets better.
Sold $NUGT Jan 2020 55 calls for 3.20. Highest available strike.
Would it make sense to sell DUST puts at this time?
Higher strikes added.
#ContangoETFs The $NUGT positions I sold in first quarter are starting to close:
BTC $NUGT June 30 call for .15 on Apr 15. Sold for 1.35 on Feb 19th
BTC $NUGT Sept 35 call for .20 yesterday. Sold for 2.06 on Jan 31st.
Looks like $DUST may be coming in to play soon.
#ContangoETFs Sold to Open $NUGT Jan 2020 40 calls for 2.10. Took over a month since it last peaked, but patience can be a virtue with these levered suckers.
I am long $TQQQ 66.67 LEAP calls for Jan 2020. I wanted to look at the effect of compounding on the TQQQ, which moves 3x the $QQQ on a daily basis. Levered ETF’s like this are naturally drawn toward zero, a topic I’ve covered before as #ContangoETFs. This is why some of us sell calls on $DUST and $NUGT and a few others like $BOIL. Even though they can go high pretty fast, they will always be drawn back toward zero.
Here’s a chart from my long-ago webinar demonstrating the effect, using hypothetical 10% moves, up and down, on $GDX, and its levered ETFs NUGT and DUST:
As you can see, over just 4 days of moving up and down, GDX is only down 2% and both ETF’s are down 18%. Note that even though NUGT is bullish and DUST is bearish, they moved down the exact same amount.
So I was thinking of TQQQ over the last several months, since the market has gone up and down significantly. Unlike the gold miners, the indices like QQQ have been steadily rising for years, so can we can expect better behavior? I found that the close on June 6, 2018, was only 17 cents off from yesterday’s close on QQQ, so basically the same, and the perfect point from which to measure.
First, I looked at the intraday high of the year, on Aug 30th.
$QQQ up 6.6% from June 6 (175.86 to 187.52)
$TQQQ up 19.1% from June 6 (61.61 to 73.36) *better
This is not surprising, as the move was straight up, and TQQQ performs x3 the QQQ.
Then I looked at yesterday’s close:
QQQ flat at 175.69 from June 6th
TQQQ down 11.7% from June 6th *worse
So, from June 6 until now, TQQQ has suffered from the 3x compounding, while QQQ ended flat.
Looking at a longer time-frame, from the summer highs of 2015:
QQQ up 49.6%
TQQQ up 129.0% *better
What do we conclude? If an underlying has a persistent bullish trend, as QQQ and all the major indices have had since 2009, the triple levered ETF’s will perform better. However, if we enter a period of consolidation, or a bear trend, they will perform more weakly than the underlying.
#ContangoETFs $NUGT peeking above its recent highs. Sold June 30 calls for 1.35.
#ContangoETFs Yesterday, Sold $NUGT Sept 35 calls for 2.06. First time back in NUGT in a long time, and currently my only ContangoETF position.
#ContangoETFs Closing out the year by closing out final $BOIL positions. Was forced out of Jan 45 short calls by the spike higher… made some back with rolls, but still at a loss overall. I will reserve this symbol for large seasonal spikes in the future.
Closed BOIL Mar 50 call for .90. Sold for 4.15.
Closed BOIL June 66 call for .70. Sold for 7.20.
#ContangoETFs Closed the last of my $BOIL Jan 45 calls for 3.30. I’m underwater despite a few rolls, but this is closest to the money that I had. I want to be ready should we get another winter push higher.
Down below 38 today
#ContangoETFs BTC $KOLD Dec 21st 12 put for .80. Sold for 2.30 on 11/19.
Closed $KOLD Dec 21st 8 put for .20 and 9 put for .25. Both sold for 1.20 each on 11/19, as part of a roll campaign from ITM $BOIL calls.
#ContangoETFs Sold $KOLD Dec 21st 12 put for 2.30.
#ContangoETFs Sold $KOLD Dec 13 put for 2.30. A safer bet since KOLD is closer to zero than the BOIL calls are to infinity.
#ContangoETFs Sold to Open $BOIL March 105 call for 6.80. Building back recent losses slowly.
#ContangoETFs I’m shedding one a day. I can’t roll these, as the current mania could keep going higher. They will have to be made up with multiple smaller premium trades after things settle down.
BTC $BOIL Jan 18th 45 call for 23.60. Sold for 2.40 (avg price) in Sept/Oct. Closed this morning before the move from 60 to 70. I have 4 ITM contracts remaining.
BTC $DUST Jan 18th 50 call for 1.10. Sold for 4.00 on Aug 16th.
#ContangoETFs I searched back for spikes on BOIL that were over 50%. Below is a chart with:
Date of the High
Percentage up from the recent low
Weeks it took to go UP low to high
Weeks it took to go back DOWN to the low (or at least in the neighborhood)
As you can see, from a percentage basis, this current spike is the highest. We also got here more quickly than other spikes above 100%. I don’t know whether we can say that this means we should be topping. But the freak out of current traders, being long oil and short NatGas, is largely responsible for what we’re seeing now.
We know it will drop again, but cannot say how long that will take or how high it will go first.
#CoveredCalls – From what I can tell so far I think all of these will make very good long term covered call candidates. Would love to own ’em all at a low basis for nice income generation. Compared to regular dividend stocks I think these can blow those returns away. More volatile but that’s great for the selling…
#ContangoETFs Surge continues. New strikes added up to 66.
#ContangoETFs I got a handful of $BOIL Jan 45 calls, so I need to start rolling out.
BTC 2 of them at 7.00 and 7.10. Sold for 2.40, avg price .
Will consider rolls next week. Need to see if this is going to keep pushing higher.
#ContangoETFs New highs today. For those of you without the history, scroll through the daily chart back a few years. You’ll see it can have some strong pushes up, but it always comes back down. Since winter hasn’t started, we could see this uptrend continue for weeks. If you’re forced to roll, you can decide whether to stop out today, and wait to sell replacement calls days or weeks later. Be very careful selling puts. It can work great as we fly higher, but don’t sit in short puts waiting for the last few pennies. Take profits, because when this thing turns around, it’ll drop fast.
Just note, the effective price when this thing started in 2011 is 4,000. It WILL come down eventually.
#ContangoETFs Sold $BOIL March 50 call for 4.15
#ContangoETFs $BOIL gapped up to a 10-month high.
Sold BOIL Dec 21st 45 call for 3.40, filled on a long-standing GTC order, adding to my position.
#ContangoETFs Another ETF working as expected, drifting ever lower. I foolishly should a strangle weeks ago to roll out of a pressed call. So now it has been breached.
BTC $GUSH Dec 21 puts for 3.45. Sold in a strangle for 3.87 on Aug 15th.
Sold $GUSH Jan 2019 25 call for 3.50. Will sell another.
Also: BTC $GUSH March 55 call for .40. Sold for 4.20 on Sept 25th
#ContangoETFs Sold $DUST Jan 2019 45 call for 2.00
Sold $BOIL Dec 45 call for 2.45
Sold $BOIL Jan 45 for 3.80, adding to my position
#ContangoETFs BTC $GUSH Dec 21st 57 call for .50. Sold for 5.20 on July 9th.
Sat on my hands today… I don’t know whether to short or go long… need another day!
BTC $DUST Nov 16th 49 call for .25. Sold for 2.50 on Aug 15th.
BTC $DUST March 15th 60 call for .80. Sold for 3.00 on Aug 16th.
Bought to Open $UVXY Nov 9th 112 call for 1.30. A hedge against short calls. I’d rather be selling it, but gotta stay safe!
#ContangoETFs This is one of the few short options positions I’m managing in this correction…
I have a few #VXXGame positions, but other than that my shorts are mostly calls in commodity ETFs that aren’t as affected by the selloff.
Sold $SOXL Dec 85 put for 5.40.
Sold that for 1.60 more than I sold the Dec 90 put on Monday.
#ContangoETFs At the bell, filled on my next $BOIL Jan 45 call for 3.00. Put in my next for 3.75
#ContangoETFs My next order filled; sold $BOIL Jan 2019 45 call for 2.25. Next order in to sell at 3.00.
#ContangoETFs Sold $BOIL Jan 2019 45 call for 1.75, adding to my position. Order in for another at 2.25.
#ContangoETFs Sold to Open $BOIL Jan 2019 45 call for 1.25. Highest strike.
#ContangoETFs STO $GUSH March 55 call for 4.20. Looks like I was filled at today’s top.
#ContangoETFs Sold $DUST March 60 call for 5.35, adding to my position.
Had to make a few rolls today:
Rolled $FB Sep 14th 170 puts to Oct 5th 165 puts, .10 credit.
Closed $FB Sep 14th 182.5 calls for .20
#CoveredCallCampaign Sold $BABA Sep 21st 177.5 covered call for 1.54 (what’s happening to BABA?)
#PieTrades Sold $AMAT Sep 14th 42.5 covered call for .72
#ContangoETFs Sold $DUST Nov 60 call for 1.95
#ContangoETFs Put in these orders after the open and they filled as the ETF rose. Wish I’d waited until the close!
Sold $DUST March 15th 60 call for 3.00
Sold $DUST Nov 16th 49 call for 2.50
Sold $DUST Jan 18th 50 call for 4.00
#ContangoETFs Stopped $GUSH Dec 32 put for 6.20. Sold for 5.05 in a strangle-roll months ago.
#StrangleRoll: Sold GUSH Dec 21/45 strangles x2 for 3.87.
Also, closed GUSH Sep 62 call for .10. Sold for 1.60.
#PieTrades BTC $OLED Aug 17th 120 call for .20. Sold for 2.00 on Friday.
BTC $MU Aug 24th 53 call for .10. Sold for .85 on Monday.