GILD rolled 16 DTE 76 put out a week and up to 77.5 for 0.86 credit. Sold for 4.15 off a bunch of rolls and has now been converted to a #fuzzy. It was down to 0.25 and going skiing tomorrow so will not be trading.
Jan 16 #Fuzzy Land
This was a day about luck for me. I woke up with the thought that I really want to cut down tickers so I can have a stronger focus on fewer positions. The market opened strong, and I had a chance to close some fuzzies for nice profits. I closed CELG (my now oldest Fuzzy), MNST, ADSK, MCD, NVDA, BABA (BABA captured a quick $2150 profit before tanking, really lucky on that one), COST. My total net profit now on CLOSED fuzzies is $45,741 in about 5 weeks. That was the good news of the day.
I also opened the day pulling off hedges on all my SPY and QQQ Fuzzies. Of course, they were net debit to remove, and then the market had it’s little sell off. As the market was selling off I set up new non-hedged fuzzies in IWM and DIA and parked them with “blue sky” prices. I kind of lost track of them and the blue sky prices hit. So on IWM I have Feb 158/158/155 for 1.34 and in DIA Feb 259/259/256 for 2.00. So lots of index fuzzies right now with no hedges on. I also have a new non-hedged GLD fuzzy Feb 127/127/124 @ .72.
Fuzzy seniority now goes to MU as my oldest position.
CELG is a pretty good story about the power of fuzzies. That one was set with a $110 synthetic. Since setting it, the stock has fallen to a low of 101. I’ve kept it hedged constantly, sometimes with debit rolls, sometimes beautiful weekly profits. So despite CELG falling from $110 to the low 100’s I was able to net out $764 (on a 10-lot). And honestly, I didn’t do nearly as well as I could have. I’d give myself a C+ in managing it.
I have my very first Trader’s Almanac. Fun little book! It shows tomorrow (Wed) is the strongest day of the month, historically. If that ends up being the case, I’d like to peel back on some of the index fuzzies that I have.
#Fuzzy #SyntheticStock – No that’s not another California wildfire you smell…it’s me thinking! I’ve got a small list of tickers that I would be very interested in adding a Fuzzy or synthetic position to. With earnings coming up on all of these I was considering selling some aggressive puts down in areas I would like to add the Fuzzy anyway. Kinda like selling puts to acquire stock and then writing covered calls.
Since I tend to have bigger synthetic positions than I would with real stock, these put sales look like they could be quite profitable if the stock doesn’t happen to pull back enough. Another option would be to sell spreads too…then if the stock implodes the Fuzzy wouldn’t be down hardly any at all when it gets set. Or…sell naked puts at half size and then if the stock implodes add the other half down at that level. Either way…just roll the loss into the basis of the Fuzzy if the stock really drops…otherwise enjoy the huge gains from the put sales.
For example, one of my all time favorites is NVDA. Great premium and easy to roll. I would really be interested in going long starting down at the 200 level and adding below that. Let’s also assume that a 6 lot would be my max synthetic size.
I could sell a put ladder starting at 215 (or anywhere depending on appetite for risk) and then every 5 points below that down to 190. Premium would be about 19 dollars. Great trade if the stock rallies. If the stock tanks then put the synthetic on there while rolling the put sales into the basis. Obviously the trade would start out underwater similar to covered stock…which is ok. Plenty of time to sell weeklies to eventually profit.
I guess the point of this whole thing is that there may be some tickers you like that won’t come back enough to get an entry point. Selling the puts while waiting could pay off quite nicely too.
Jan 12 #fuzzy
Fair question on the last post about risk. I’m always VERY concerned about risk. Being concerned about risk cost me a LOT of money this week. I’m planning to open a shelter for battered hedge sellers. I have a feeling a few folks here will be standing in line with me. I’ve had a wonderful start to the year. Except that I probably lost 20K in hedge rolls this week. But here’s what I’m doing to address risk: I’m closing fuzzies every few $ move up in underlying, taking the profits and resetting them. They are being reset smaller and tighter. Much as I would like to stay unhedged, I just can’t. So my Fuzzies are smaller in size, tighter in spread, and still hedged. So I’m not making as much as my brave hedgeless friends, but I know I can handle a crash. Fuzzy design started for me with $10-wide protection on the puts. Now they are all $3-$5.00. Also by closing and rolling them frequently, the long puts are retaining most of the their value.
The net on my CLOSED fuzzies is now $38,615. So that’s a nice crash cushion.
Current amount of hedges on open positions net collected and sold: 18,770.00
Just some highlights:
1. Closed TGT due to runaway hedges for net $870, but 300% on the core
2. Closed and reset all the Q’s with tighter puts for a net of $4235
3. Closed AAPL for a net of $3300.00 due to older design with $10.00 spread risk
4. New MU Fuzzy on the recent dip, nice weekly premium Mar2 43/43/41 @1.77 w/ 44.5 call hedge
5. New JPM Jun 110/110/105 @ 5.18 with 112 hedge (might be too tight)
6. COST flipped the cards and put on a bull fuzzy here with shored up technicals Mar 190/190/185 @ 5.20 with a 195 hedge due to squeeze and “RAF buy” indicator
7. SPY is all reset with 277/277/274 with hedges
Hey….Remember “SPX Guy?”(ok, maybe not a guy) On January 2? The guy that did the 5000 Risk reversal in SPX? I’ve been tracking that trade just for fun. How would you like $30,975,000 in 9 days.
I’m very happy to have this 3-day weekend! Hoping rest and recharge for all of you, too!