EOG

Closed out the inverted fly at 97/98/99 that had been converted from a violated credit spread for 0.11 debit. After all said and done made $464 on 10 contracts.

Still have the 110 #fuzzy to manage.

#spycraft Just opened Feb 1…

#spycraft

Just opened Feb 1 expiration IC at the 245/242 puts for 0.25 credit and the 166/269 calls for 0.39 credit. Could probably get about the same now.

#fuzzy

WDC rolled the 4 DTE 70/70 out a week for 0.62 credit. Cb now 18.49.

The #spycraft trades will be managed as per the discussion last week. Hard adjustment points as soon as the short strike is breached or if in expiration week closed for a small loss or rolled. As long as we have 2 or more weeks left to expiration will back ratio.

Finally unraveling some trade adjustments…

Finally unraveling some trade adjustments over the last 14 weeks and bringing in some profits again. Have been flat for 3 months but a very nice week today 🙂

#fuzzy
EOG 110/110 with the back ratio ccs wrapped around it from the other day. With the slight pull back this morning I was able to sell 5 99 calls for 15 DTE for 1.97. What this did was lock in a no loss trade on the credit spread. Original trade was the 97/98 ccs. Back ratioed the other day. With todays trade I locked in a gain of $25 total if it closes at 98.02. Anywhere above 99 or below 97 that expands to $505. Basically inverted a butterfly but because of the gains from the back ratio now have that part of the trade risk free.
After the original post, rolled the 22 DTE 110 put out to 43 DTE for 0.45 credit. Cb now 13.96.
EXPE 120/120 125/126, 117/118 ccs and 118/120 ccs at cost basis of 9.43. Managing same as EOG. Any of the short strikes breached will delta neutral hedge (usually buy back half of the shorts).
GILD 70/70 cb 8.48. Will roll in 2-3 weeks.
MU 35/35 cb 14.80 and will roll 1-2 weeks
WDC 40/40 cb 19.11. Roll next week. This will be the longest to recover. Good thing I have a lot of time.
XBI 80/80 at 13.97 rolls in 2 weeks.
LNG 50/60 1 DTE rolled out 15 DTE for 0.48 credit. Cb 14.06
GILD 67.5/69 cb 8.90 and rolls in 2 weeks

#pietrades
LNG batch 1 61 CC should be assigned tomorrow at 57.70 cb
LNG batch 2 61 cc should be assigned at 58.53 cb.

#lizardpies
SQ should expire for full profit tomorrow. 667.50 profit on 3 contracts in 2 weeks. Finally an easy winner chicken dinner.

#spycraft
22 DTE 242.5/240.5 pcs for 0.20 credit. Small account so only 5 contracts. However, once batch 1 LNG expires this is one of the accounts I will re-dedicate to #spycraft with the mechanical management rules. Trying to double the 2 accounts in a year. Easy to keep track of since the new year.

I will be legging into an out of a lot of trades now. Anytime I can lock in a gain will do it. No guessing about what to do when short strikes are violated, they will be delta neutral hedged or shut down at a minimal loss, no questions asked. After looking at 4 years of #spycraft trades, controlling losses was the number 1 way to make this tactic profitable. The other way appears to be applying some timing by legging in and out of sides.

Being mechanical and following my own rules.

EOG 97/98 16 DTE credit spread was breached on the short side this morning. I delta neutral hedged it by buying back 5 of the 10 contracts at the 97 strike . Actually could have done 3 but was in a hurry. Price was 3.1 after I had sold them for 1.48 last week. The math is complicated because I now have a 5 short: 10 long ratio against a put #fuzzy but looks like anything above 99.04 and I break even or make money. If we drop I can always sell 5 again to take the ratio back to 1:1. Since doing that I am up $1635 on the credit spread part this morning.

I will be doing this with any breached credit spread going forward based on the TT research that showed violated credit spreads rarely return to the original range. As long as there is more than a week left to expiration. If inside that would roll first out to 21 DTE or so and then back ratio.

EXPE STO 10 of the 23 DTE 118/120 CCS for 0.40 against a 20 contract put #fuzzy.

Will start some #spycraft on Monday once my LNG and XBI cc are assigned.

Credit spread tweaks

EOG STO the 21 DTE 97/98 ccs for 0.23. Cb now 14.41 against a 120/120 and 125/126 put #fuzzy
EXPE STO the 21 DTE 117/118 ccs for 0.20 credit. Cb now 9.43 against a 110/110 put #fuzzy.

It rained over the weekend and my family was busy so I watched a bunch of tasty trade re-runs. 2 things I forgot about. They did a section on defined risk and looked at the number of times tested credit spread returned back to the level you placed the spread. It was less than 2:10 times, actually I think as they looked across multiple occurrences and it was much lower around 2%. So gave me an idea for credit spreads and #spycraft which I will start up again next week after some CC are called away.

I will be very mechanical in adjusting credit spreads now. As soon as the short strike is breached, I will delta hedge it to neutral and create a back spread. Odds improve that if it is breached will not return to that level so at that point you have a directional trade and might as well take advantage if it.

What this means is that if the short strike is breached, I will buy back half the # of shorts calls/puts as the original credit spread thereby creating a 2:1 back ratio. Then if we keep moving in that direction you get the boost from the directional kick.

Probably best to set these up 21-45 DTE so you have some room. A weekly probably would not work as well once ratioed because of the gamma effects close to expiration.

Reading posts a lot of…

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?

#atomicfuzzy, #callcreditspread

Lots of trading and work,…

Lots of trading and work, not much profit. The #fuzzy trades hold up well but since I am so far out in time and so far ITM on some of these now, not much income or fast theta decay. Had I known we would be in a full bear I would have unhinged them and would be collecting profits now.

#fuzzy
EOG 110/110 puts are now way ITM. Market makers are being greedy. I have an order in to roll the 29 DTE out to 43 for 0.45 credit but no one will take it. If I can’t roll it will reset or shut the entire thing down for about a 6 point loss as it gets closer to expiration. Hoping for at least a little bump in oil prices. cb 14.64
EXPE 125/126 and 120/120 rolled the 15 and 22 DTE out to 36 and 43 DTE for a total of 2.1 in credits. Cb now 9.63.
GILD 70/70 nice bump today. Cb 8.48 and will roll in a few weeks.
MU 35/35 cb 14.80. Getting dragged down further into the black hole by AAPL.
WDC 40/40 cb 19.11 same as MU.
XBI 80/80 cb 13.97
LNG 50/65 cb at 14.54
GILD lot 2 67.5/69 cb 8.9
Most of these are out 15-22 days before further rolling.

#pietrades
TQQQ 50 cc at 57.60 cb. Will either roll to a leap in 2 weeks or hope for rebound. IRA so I can sit on it but would like to be generating some income.
TQQQ lot 2 50 cc 58.10. Same story.
LNG 61 cc expires next week, cb 57.7 and if expires ITM will be first real winning trade in 13 weeks.
LNG lot 2 61 CC cb 58.53 sam as above.

#lizardpies
SQ 55.5/55.5/56.5 straddle expires tomorrow rolled down to strangle 54.5/55.5/56.5 for 0.49 credit. Total credit now 2.04 with cb of 53.46 if assigned and no risk to upside.

I really think the jade lizard will be an excellent tweak to the #pietrades and possibly increase returns another 10% annualized. As I unwind some of these other trades will be putting more of these on.

I also need to be much better at directional trading!!!!

As I have said before, the income will not keep up with the drops, as much as the market is a 50-50 proposition, the more I trade the more I realize being right on directional makes a huge difference to the success of a trade and profits in general.