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.
Sue
A lot of trades today, rolling down short calls. I started the week this morning with $22,516 in short call premium to collect. That provided a cushion for today, but of course it’s not a 100% hedge.
1. AMZN rolled the 1745 calls down to 1720 for this week, collecting $1661 on the original calls and another $7.25 on the new one.
2. Closed the SPX #UndieBear for $5090 profit, if you add Thursday’s $1290 profit onto this, that’s $6380 in 3 days. This was a small 2×1.
3. GS and QQQ: got the butterfly fill on my Put In/Out trades from about 10 days ago. This locks in partial profit and cuts risk on them. I start with a skip-strike in-and-out spread, then look to butterfly it w/ a broken wing for half the price of the first spread.
4. MU rolled down calls from 62 to 57.5 (25 delta) for $1523 profit on the original ones and an add’l $376 on the new.
5. TSLA closed out the put fly and put spread for around $80 profit I think, wanted to simplify book this morning.
6. SPY #Saf-T rolled Wed calls out to next wed, collected $1536 on this week’s calls. My protective puts on #Saf-T are up a collective $32,800. They are sentries for me right now.
7. MCD added a put diag to my #Undie to balance deltas and bring in some premium for next week, cuts risk.
Don’t get me wrong, big losses across the board here, but all these trades are easy for keeping your head on straight. Just collect the hedges and reset.
Sue
SPX: The first trade I got off at the open was a new #UndieBear Aug 2785p x2 @52.00 Jun 29 2750p x -1 @ $10.80. No profit ceiling on a downside move.
CVX: Rolled calls into strength from jun 22 to jun 29, netted $330 on roll of 3 calls. Jun 29 126 @ 1.68.
IWM: I have a #Saf-T on this with short calls at 168.50…so dancing around the roll on this to get as much premium collection as I can.
LMT: The bulk of my calls were rolled on Wed, but I have two stragglers that I will let expire and sell new near the close (naked for an hour).
Oh, RHT: I got cute on the dive last night and bought 100 shares @ 150 expecting a snap back. So now I have a #CoveredCall . Sold Jun 29 $150 call for $1.10.
That’ll be about it for today.
Sue
IWM rolled Jun 22 168.5 to Jun 29 168 (went down, itm). Netted $494 on a 13-lot.
I ended up keeping 82% of premium sold for this week: Collected 17,917, kept 14,722.
Oh, almost forgot. The #Fundie maybe not so bueno. Rolled down calls for jun 29 on NVDA/ADBE/BABA to collect some add’l premium for next week. Kept same expiration.
1. SPX #UndieBear I just took $1290 profit in one day. This is a highly responsive trade to the combo of vol increase and price decrease. Market Profile is showing a developing 45 degree line for today, meaning folks are getting short in the hole. So decided to take profits. (Whoops scratch that on the 45 degree line, it looked like it was holding as support, but it broke)
2. Was at the hospital all day so took off the AMZN “vol fly” at the open so I wouldn’t have to manage it. Saw an $88 loss. I slipped in the close order before the drop in AMZN…it would have been fine in my fly range, but would have had some short term pain on it.
3. New AMZN trade: AMZN/XLY #DoubleRatioUndie AMZN is too expensive to double-undie, so I’m using XLY as a proxy for the put side. AMZN: Aug 1700c x2@106.15/Jun 29 1745c x-1 @19.30 XLY Aug 113 p x10 @2.93/June29 111p x -8@.63. The XLY side removes about 20% of the risk on the AMZN side.
4. TQQQ roll #Saf-T : Rolled Jun 22 to Jun 29, netted $4660 on the Jun 22’s. Rolled same qty but dropped to 62.5’s for 1.38.
5. Added an MU #DoubleRatioUndie at the open this morning: Sep 57.5c x10 @7.65/Jun 29 62c x -8 @1.39, Sep 62.5p x 2 @5.35/Jun 29 60 p x -1 @1.15. Max loss about $4800, gain at $62 next week is $1302. Premium sold for next week = 16% of risk.
Only two things left to manage tomorrow: CVX and IWM.
Hi Everyone! I’ve got a little rolling activity here:
BA: First this was a #DoubleUndie from Jun 14. In two accounts I had to close the 2×1 put ratios due to the extrinsic on the short puts running out of gas. This brought a profit of about $2900. Then I rolled my Jun 22 365 and 372 calls to July 6 365 calls, and added extra calls to convert the trade from an Undie to a #Diagonal . I netted $2742 on the Jun 22 calls. My net credit accrual on BA = 73% of the losses (I rechecked my math, was way better than I thought). So there is damage control to be done. One of my longs is Aug, one is Sep….so lots of rolling opps here. I have the spirit on this one to fight it out 🙂 I’ve got good starting baseline numbers, so I’ll always know where I am in recovery of losses.
SPY: Rolled some #Saf-T trade calls from Jun 20 to Jun 27. Netted $737 on the rolls. The Jun 20 calls were pretty cheap due to divs last week and lowered premium. I rolled from 278 to 277 for .71 on the new 277’s. BTW, all the Saf-T puts are up huge…they be doing their job.
Coming into the week I had $17,917 in short call premium (Jun 22 exp)….it’s helping, but it’s quite an ugly day here.
MCD: Rolled Jun 22 calls to Jun 29, collected $444 on the jun 22 170’s and rolled to 167.5 @.94 and added qty 2. This converts Undie to #Diagonal.
NFLX: Converted #Fundie to #DoubleFundie using this strong day to cut risk. Added a Jul 13/Jun 29 2×1 put ratio. Before add on max risk: $4000; after add max risk: $1110. Nice profit opp still in the trade, $800-$1200 on small continued upside. Downside BE shifted to $386. Jul 13 397.5 p x2 @14.05, Jun 29 390 p x -1 @7.05.
NFLX: Closed full position for $789 net profit
LMT: I guess the senate blocked their delivery of jets to Turkey. Did a partial roll of calls (qty 4 in 2 accts) from Jun 22 to Jun 29 rolled from 317 to 315. Netted $1208 on the Jun 22. Sold Jun 29 for only .68. Still have 2 calls at a diff strike to roll this week.
Happy Friday Everyone!
I didn’t have a ton going, ‘cept for one big thing. That later.
IWM: #Saf-T 1000 shares called, net profit $1200. Reset 1500 @ 167.66, 14x jul 27 166 puts @ 2.10, Jun 22 168.5 calls x13 @ .70
I was squirming bad this morning with a ton of SPY shares on and no short calls against them. Luckily the market rebounded, I got some short calls for next Wednesday in the book. I can sleep at night when I know my short calls are on. I’m not kidding when I say it felt really uncomfortable not having them. I will change this strategy next quarter so that calls are always on regardless of dividends.
BA…ugly, but I’m not too concerned. Got lots of hedges on, got a put diagonal kicker, so far it’s looking like a retracement. Maybe even the handle of a cup forming.
Ok…beware when @kathycon MamaCash and I open the lab. We can stay up all night online battering trade designs about and running backtests. We are ALWAYS taking established designs, or other people’s ideas, and reworking them for the best success rates, highest profits, lowest risk.
We reworked the dates and ratios on #Undies last night. I think you should let us test these out a bit. But what we discovered by backtesting is that a 30day long with a 14 day short in a .66 ratio (3×2, 6×4, 20×13) yields a much higher return on margin than using the longer dates. Because the 30-day longs are cheaper, there is less risk, which directly affects the return. These trades go on with a slight positive gamma, slight negative theta, positive vega…so kind of nice greeks on these. All of the 1-year returns we are looking at are really high, like 300% to 1200% (return on margin risk).
Consider these “petri dish” trades right now…we’ll run ’em down and report on effectiveness.
Between the two of us we have a lot of 3×2 tests on now in NVDA, ADBE, BABA, NFLX…and some others. We will report on the effectiveness of this.
Here is an example of one I have on BABA: Jul 13 202.5 call 3x @ 9.20/Jun 29 210 call 2x @ 3.40.
Everyone have a safe weekend!
Sue
p.s. premium collection this week was $14,811, 90% of what I sold. Good week!
Yesterday I posted a plan for SPY with ex-div tomorrow. The plan involved the assignment of all my #Saf-T SPY shares, then replacing those with short puts for tomorrow expiration….which happen to have the div already priced in, along w/ a little premium.
As it turns out I had about 1000 shares called, but most of my short calls for last night’s expiration expired for full profit.
So I sold tomorrow’s 279 puts to replace the 1000 shares that were called yesterday, at $1.65.
Unless the market goes bonkers tomorrow, this is a guaranteed assignment due to the SPY price action on ex-div day (a $1.10 drop in price is guaranteed).
I have also done the required long put coverage for #Saf-T trades, buying Jul 27 276 puts.
So, for tomorrow: 1. I collect SPY dividend on 2000 shares, $2200 (pay date is actually next friday I think). 2. I collect the put premium on 10 puts $1650. 3. I take assignment of 1000 shares @ 277.35 (adjusted). 4. I can re-commence selling weekly premium on the shares.
Good Morning! Who agrees with me that the best commercial EVER was the Geico Wednesday (Hump Day!) camel?
So the #Saf-T trades are performing better than I expected, with very high degrees of protection. I have quite a lot of SPY that I had sold calls against for today, so the calls would be cleared by pre-ex-div tomorrow. They are in the money so I’m going to let the shares get called (if FOMC cooperates). Then I will clear and reset the 45-day 40-delta puts (protection is cheap again). I see that the Friday SPY puts have the dividend in them, so rather than hold shares for a div, I will sell a boatload of 1-strike ITM puts for Friday. Selling ITM puts is the same trade as a covered call, so this will be a way of getting the virtual dividend, coupled with extra premium that a call would bring in. Due to the upcoming drop in stock price on Friday for ex-div, I should get the assignment I want to re-populate the share position.
BTW, here is a pic of the price slices on my 3000 shares of SPY. Note the risk control in place on a 10% drop. A 10% market drop yields a 2% capped drop. This is great for higher yield cash storage…way higher than a CD/Money Market, but safe.
I’ll update here when my reset is complete, including the realized profit for the week on this trade.
Here’s a Hump Day remix….actually it’s a tad creepy 🙂
Busy day here! Every single one of my #Saf-T trades is in the money for expiration, so I’m executing share calls and resets on them in multiple accounts.
LMT: I rolled into strength this morning, which means I rolled at the day’s high. This means that I didn’t collect a whole lot on the jun 8 calls ($222 of $1416) but I sold really high for next week, $2550 worth. If you recall, I’m now using LMT as a proxy to recover RTN losses (apples to apples in just one account). Last Friday the LMT-RTN was $-3858. Today it is $-3157. Gettin’ there.
My total premium sold for today was $14,894. It looks like I will collect $10,184 for a 68% retention.
I almost forgot my note-to-self about ETF divs next week and started a roll into next week. I quickly fixed that. All my SPY rolls are to Jun 13, the TQQQ rolls are to Jun 22, pretty far OTM.
Everyone have a fun and safe summer weekend! It’s been a great week for covered’s.
Oh…anyone in TWTR short calls….just keep an eye on extrinsic value, no action today necessary.
BA: I’ve got two of these on, a #CoveredBackRatio and an #UnbalancedDiagonal . The CBR had a virtual call assignment today, closing the full position for a net $2964 profit on an 8×4 setup. The UB I put on right before the close yesterday and is up smartly today.
TWTR: Opened a new Unbalanced Diagonal: Aug 37 call x10 @ 5.25, sold Jun 15 40.5 call x8 @.92. I’m really loving these unbalanced diagonals, how you can really bring the long strike up closer to ATM, thus lower risk, and at the same time bring the short call down closer to ATM (collect more $$), but the ratio makes the trade work so well.
SPY added a few more #Saf-T contracts. I’m still waiting for Saf-T shares to get called so I can reset them. I decided I make more profit waiting for full profit and paying the assignment fees, vs front running the assignment myself and giving up a few cents in order to save the fees.
I expect a really slow day from here on. It’s a “theta day” where I just sit back and catch the pennies.
Sue
TWTR: Out the gate executed a virtual call assignment for $1889 profit on a 10×7 #UnbalancedDiagonal . That’s multiple thousands of profit (in a couple accts) since I suggested the TWTR stock replacement idea to y’all about 10 days ago. Flat TWTR right now.
June 1 #CoveredBackRatio #CoveredCalls
My week is just about done. For this week I had sold $9,574 in premium, and have collected $$8,189, that’s an 86% collection. As @MamaCash says, this has been a perfect few weeks for “covered’s.”
MSFT: I had to close an #AtomicAlligator trade due to peak T+1 profit line. Netted about $1400 total. The Atomic Alligators may become extinct now due to recent trade design evolution. They were fun!
TWTR: Needed an emergency debit roll, rolled Jun8 34 to jun15 36. I had to pay .87 for $2.00 gain.
ISRG: MM’s are always difficult on this. I rolled Jun1 465 to Jun8 467.5. I was only able to pocket $60 on the Jun 1 but this “roll into strength” gives me a ton of premium for next week, $5.45, + 2.50 in add’l head room. Oops, I see the new strike is blown already, I will watch extrinsic for full position close. 11:00 am update: closed out of full position for $1215 net profit.
RHT: Rolled Jun1 165 to Jun8 167.5 for $282 net on June 1.
CRM and NVDA executed share call.
One note on #UnbalancedDiagonals vs #CoveredBackRatio I’m finding I need to load them in a risk graph side by side and view P/L performance at up-and-down price points. It’s not a given that UD’s are always better than CBR’s. The extra work to compare the two creates “edge.”
One last note on a new trade called #Saf-T trade. I have a little cash that needs a lot of protection. So I loaded a trade into the backtester that brings a return better than a CD/money market, but very safely. It’s kind of a twist on the Unbalanced Diagonal, coupled w/ a collar. SPY: Buy 1000 shares, Buy qty 9 45-DTE 40 delta puts, Sell 8 7DTE 40 delta calls. You’ll notice I’m doing 1 put short of full protection, which bumps up performance just a tad. It adds 1% to the 2 year performance. The rolling calls need to finance the puts, plus add a little extra. This would be managed like a covered call: 1. allow shares to be called, 2. debit roll, 3. credit roll.
Here’s 2 year and 6 month performance numbers (these numbers do not include div payments):
SPY 2 year: 10% return, Net $26,992 6 month: -1.1% return, Net -$3,068
QQQ 2 year: 8.2% return, Net $13,681 6 month: +1.4% return, Net $2048
TQQQ 2 year: 46.1% return, $112,000 6 month: +9.1% return, Net $29,592
I put this on in both SPY and TQQQ today. We are a few weeks away from dividends on these.
Options Bistro 