Position Updates

Newly added this week that survived to the weekend:

  • $IRF  I tagged along in the September 30 Calls on the M&A rumors (deal was eventually announced later in the day). Options Net: -$.72
  • $MNST  A “to fade” setup. I am currently short the Oct/Sep 85 Put Calendar. Options Net: $1.05
  • $VXX  I am long the ETN at $27.90 and short the August 29 weekly 28/27.5 Strangle. Options Net: $2.05
  • $JRJC (50/50)
  • $PBYI (50/50)
  • $HAIN (Earnings)
  • $INTU (Earnings)
  • $RDEN (post-Earnings)
  • $ROST (Earnings)
  • $SMTC (Earnings)

The Long Term position in $GME acted well after Earnings. The remaining $CBI position in the Submarine Basket is the short October $60 Puts (the short stock piece hit a Stop for +$2.50). $KR is no longer an official SB position but the trade still remains with a 3% Trail Stop. The $BIOF position in the 50/50 Basket hit a Stop.

Most of my activity was in Earnings Trades:

08232014

Here is the Summary for Swing, LT, IRA accounts:

Positions_08232014

Position Updates – 08/09/2014

I was not as active in the markets this week with new trades as I focused on managing existing positions. However, I do have some Newly added that survive to the weekend:

Exits:

Submarine Basket:

50/50 Basket:

Here is the Summary:

Positions_08092014

A healthy setup in Cardinal

If you like to improve the probability of success in a trade it is important to have a solid disciplined approach for trading. Follow a routine. Keep doing what works. Stop doing what doesn’t work. This approach needs to include the review of relevant data to help support your thesis – whether Bullish or Bearish – and should include Option chain data.

Whether you actually trades Options or not.

I have been doing some normal chart & scan review this morning and noticed the Daily chart of $CAH:

CAH_B

What lead me to look at the chart in the first place was the following additional data:

1) It hit my Large Cap scan this morning. Week Up, Friday Up

2) Look at the August Option chain information:

CAH_Aug_Options

Well hello Option Volume at the $75 Call strike. And at the Ask.

Position Updates – 08/02/2014

We ended July with a big RED day and have started out August with a lot of continued indecision along with more distribution. I focused mainly on Earnings trades this week but did find a few opportunities for the normal accounts. Newly added that survive to the weekend:

  • $PCYC (a new trade this week in the Swing account)
  • $GRMN (Submarine Basket)

Exits this week (including newly added that did not survive):

50/50 Basket:

Submarine Basket:

08022014

Earnings:

Here is the Summary for Swing, Long-term, IRA accounts:

 

 

Positions_08022014_B

A 3-piece trade in Pharmacyclics

I often do Options trades where 3 pieces are involved and this frequently elicits questions/comments from other traders. So, I thought I would use the current $PCYC trade to illustrate a few different ways to look at the trade. The specifics:

  • I own the August 110/105 Risk Reversal
  • I am short the August 08 weekly $125 Calls
  • There is an Options Net of $5.87

A different way to visualize this trade:

  • I am long the August/August 08 weekly 110/125 Diagonal Call Calendar
  • I am short the August $105 Puts
  • This trade has $15 in upside potential
  • I have to be comfy owning at $105

 

 

A look at Bear Collar protection starring my Sodastream trade

I often like to discuss a trade topic using a real live trade and thought I would highlight the current $SODA trade I have on. Here are the specifics:

  • I am short stock at $36 from 07/24 in the Swing account
  • I own an August 01 weekly $31.5 Bear Collar
  • Options Net: -$.83

Now that the Earnings event is over let’s take a look at the Daily to see where price is:

SODA

So far a nice bounce with the 50 SMA just above to offer some resistance. So how is the Bear Collar helping my position? Let’s see how the Options are priced right now:

  • The short $31.5 Puts are OTM now, last trade was $.30
  • The long $31.5 Calls are several strikes ITM now, last trade was $1.43

So the short stock piece is protected on any gain in price above $32.33 (31.5 Call strike + .83 the current Options Net). This locks in a gain of $3.67 (36 – 32.33).

 

 

Position Update – 07/25/2014

A focus on Earnings trades again this week with a few normal Swing trades thrown in for good measure. Newly added this week that survive to the weekend:

  • $HLF  I own the Aug 01 weekly 55/70/55 Risk Reversal CS
  • $PBYI  I am short the Sep/Aug $230 Call Calendar
  • $PKG  I am short the August 70/65 Strangle (remaining pieces from a RRCS)
  • $SODA  I am short stock with an August 01 weekly $31.5 Bear Collar
  • $MAN  I am long the August 80/85/80 Risk Reversal Call Spread
  • $PVH  I am long the August 115/120/110 Risk Reversal Call Spread
  • $PBYI  This is a different position than the Swing account position, this one is in the 50/50 Basket: short stock at $220.35

Exits this week (including newly added this week that didn’t survive):

Here is the Summary:

Positions_07262014

An Earnings trade review in Starbucks

We are now well into Earnings season and so there will be more info from me on trades for Earnings reports. I review each trade the same – whether it is deemed a success or a fizzle – to ensure that I am complying with my overall trading process.

There are not many traders that discuss trades that are deemed a failure so I thought I would do a blog post on how the $SBUX trade has played out. Here is the trade specifics:

SBUX

  • I am Long the July 25 weekly 80/82/83 1×2 Split Call Ratio. Another way to look at this is: I am Long the 80/82 Call Spread and short the $83 Calls as well = a 1:2 Long/Short Ratio
  • I am Short the July 25 weekly $77 Puts
  • This was done for a $.14 credit
  • This trade takes margin

Now on to the Daily chart to see how $SBUX reacted:

SBUX

A nice Doji for today (indecision) as traders negotiate for a new price for the stock after the Earnings report. For my trade, I can get very little value for the Long $80 Calls right here. The other 3 pieces are trading at a penny or two.

So the result is: I don’t get much more in additional value out of the trade beyond the initial credit – and I expect all 4 pieces to expire today. Was this trade a success? Not in terms of providing additional profit no. Did it allow me to participate for the potential reward? Yes.

I would also add one more thought here: keeping the cost down to a minimum (or even being paid to put the trade on, a credit) is a key element to my trading design. I accomplished that here so maybe it was a success after all … feel free to chime in with comments below.