November 28 weekly Option expiration plan

For those that trade Options as part of their overall Trading Process it is an important task each weekend to prepare for – and create a plan for – the upcoming week expiration. I do have Options each week that are set to expire so this is always a part of prep work.

Here are the existing positions that I have with November 28 weekly Options as part of the trade:

$JCP
$FB
$XRT
$CELG
$GILD
$FDX
$UNH
$BABA
$Z
$TLT

IBM is at a 52-week low (the markets aren’t)

IBM_52week_Low

Uh, what happened to $IBM in this Bull market?

I have been building several watch-lists for next week and this hit one of my scans that I use for the Submarine Basket. But, is $IBM a quality stock that is simply at a good discount here? Can it get even more discounted?

This may help (or not): A Ratio chart of $NYA & $IBM:


NYA_IBM

When RSI gets elevated in this Ratio chart it has signaled a buy point for $IBM several times in the recent past. Can history rhyme?

When the market speaks, do you listen?

Up until today, I have had a position in GameStop in my long-term account (since 05/22/2014). I wrote earlier this week about an adjustment I made for $GME Earnings but in reviewing the position it seems that I had begun to listen to the market more and more about the long-term prospects well before this week.

I had adjusted the position to a Short CS on 10/02 (I had been Bullish up to that point) and had set a Buy Stop at $44 (for protection, a hedge). You can read more about the details in each of the Position Updates posts that I submit each weekend.

Here is a Weekly chart of $GME showing how the market reacted to Earnings:

GME_weekly

It is possible that it can find some solid Support soon and offer a good entry for a new Long position but I will only consider it for the Submarine Basket now (the primary goal for this basket).

 

Position Updates

There was a LOT of activity this week in existing positions due to November Options expiration so that was my primary focus. I did however add some new positions that survived to the weekend:

Covidien $COV  I am Long the Jan/Dec 97.5 Call Calendar (Swing account)

Skyworks Solutions $SWKS  I own the December 05 weekly 63/65/61 Risk Reversal CS (Swing account)

Zillow $Z  I am Long the November 28 weekly $120 Calls ( Swing account)

Electronic Arts $EA  I am Long stock at $41.40 and Short the December $43 Calls (covered calls, long-term account)

Shire $SHPG  I am Long stock at $207.44 (IRA)

Potash $POT  I own the December 05 weekly 35/38/33 Risk Reversal CS (Submarine Basket)

Here is the Summary:

Positions_11222014

Earnings Trades update

I exited the majority of the Earnings Trades since they primarily had November Options as part (or all of) the trade. This past weekend I listed my plan for the week here. This is what remains:

  • $JCP  The January/November 28w 10/8 Straddle Swap remains
  • $DPZ  I am Long stock at $78 (since 10/14) and Short the March $90 Calls (covered calls)
  • $NFLX  I am Short the January $380 Calls with a Buy Stop set at $375 (hedge)
  • $FB  The December/November 28w 80/75 Straddle Swap remains

 

 

The Fab 5 update

I added $XRT this week to fill the 1 empty slot. I had added $AGIO on the break of $90 but it ended up being just a one-day trade (big pop & then faded some). It will remain on the candidate list. No material changes this week to the existing Fab 5 members.

I did take a Stop on the Long November 28 weekly $100 Calls in $GILD (continues to show weakness). There is a Buy Stop set at $104 as a hedge for the remaining short January $105 Calls.

Here is the Summary:

11222014

Into the home stretch: November Options expiration

I have spent the majority of my time managing the existing positions that have November Options as part of the trade (or all of it). This is what I have left to tend to/monitor into the final few market hours:

  • $BABA  I am short the $108 Puts (part of a trade)
  • $VDSI  I will be taking stock (from the Long 17.5 Calls). The Short $15 Puts will go poof (part of a trade)
  • $Z  I am Short the $115 Puts (part of a trade)
  • $GME  I have a Call Fly with Short Puts — I expect all the pieces to go poof. This long-term account position will then be closed
  • $INTC  I have a Long 33/29 Put Spread that will go poof (part of a trade in the IRA)
  • $DWA  I am Short the 23/22 Strangle
  • $LULU  I am Short the $45 Puts (for some clients, part of a trade)
  • $XOP  I am Short the $63 Calls (remaining piece of a trade)

I have other trades that have capped pieces (and well ITM) that will auto-exercise.