Long-Term & IRA account positions review

Long-Term account:

  • $AIG  I remain long at $39 (since 02/08/2013) and short the November 50 Calls (covered obv). Options Net: $9.67
  • $COW  I remain long at $29.5
  • $GME  I am short the November 44/45 Call Spread. Options Net: $2.58 with stock gains of $5.40
  • $TAN  I am long the November 40/43/46 Call Fly. Options Net: $1.70

IRA account:

  • $ACHN  I am long the January 2015 12.5/20 Call Spread. Options Net: -$1.80
  • $DVA  I am long at $54 (since 10/11/2012) and short the January 2015 67.5 Calls (covered obv). Options Net: -$2.27 and stock gains of $11.85
  • $INTC  I am long at $31.5 with a Dec/Nov 33/33/29 Collar PS. Options Net: -$.01
  • $MAR  I am long at $59.5 with a Jan/Nov 65/67.5/0 Collar PS. Options Net: $.24
  • $MBLY  I have a December 45/60/45 Risk Reversal Call Spread. Options Net: $.63
  • $SLCA  I am short stock at $60. I am short the January 2016 $70 Calls & December $60 Puts (covered). Options Net: $11.38 and stock gains of $34.25

 

Swing Positions review

A quick review of current Swing positions in the personal account:

  • $CRR no material change this week, I remain short stock at $70.08 (2x size) and short the November $60 Puts (2x size). Options Net is: $4.48 and stock gains of $21.84
  • $LMT  I remain short the November $160 Puts. Options Net is: $3.15
  • $UVXY  I remain short the November 45/40 Strangle and short the ETF at $40 (a hedge). Options Net is: $22.96 and gains from ETF hedges of $4.56
  • $VDSI  I continue to own the November 17.5/20/15 Risk Reversal Call Spread. Options Net: $.33
  • $VNET  I remain long at $14.92 with a Dec/Nov 26/22 Diagonal Collar. Options Net: -$.18

Position Updates

Personal Accounts

I was active in the Swing account again this week but only one newly added position survived to the weekend:

  • $LMT  Long the November 180/190/195 Call Fly with a short October 185/170 Strangle

Submarine Basket update here

50/50 Basket update here

Earnings Trades:

  • $AZO  I own an October 510/520/530 Call Fly (have a Buy Stop set at $520 as a hedge). Options Net: $1.16
  • $JCP  I am long the January $10 Straddle & short the October 10 weekly $10.5 Straddle. Options Net: -$.68
  • $RRGB  I am long stock at $49.9 and short the December 60/55 Strangle. Options Net: $4.45
  • $SNX  I am short the October 65/60 Strangle and long stock at $65 (hedge). Options Net: $5.21 (new this week)

Here is the Summary:

Positions_10042014

Position Updates (mid-week review)

Here are material changes and/or adjustments to existing positions (or newly added) this week (Swing, LT, IRA, Submarine Basket accounts):

  • $COL  I have exited the Long CS, leaving the L Puts for October. Options Net: $2.83
  • $CRR  I have BtC the October 75 Calls (frees up some margin). The short stock and short Nov 60 Puts remain. Options Net: $4.48
  • $INVN  I StC the October 03 weekly 21 Puts (leaves S Oct 20 Puts). Options Net: $1.62
  • $LMT  I am long the November 180/190/195 Call Fly (adj made today to the Call Fly from a CS) and short the October 185/170 Strangle. Options Net: -$1.08
  • $PEIX  I have moved the long Put strike down to 17.5 (so the PS is now 17.5/15). Options Net: $4.62
  • $WLK  I am short stock at 88.82 with a Trail Stop at $85 (this is not the Fab 5 position)
  • $GME  I StC the long October 41 Calls & added a Nov 40/44 CS. The S Oct 46 Calls & short October 03 weekly 43 Calls remain. Options Net: $.74
  • $TAN I added short October 43 Calls. Options Net: $1.74
  • $UGA  I am long stock (1/2 size) with a short October 56/54 Strangle (1/2 size each). Options Net: $1.05
  • $F  I am short the October 03 weekly 14.5 Puts. Options Net: $.20
  • $MGA  I am short the November 95 Puts (the long October 100 Puts were exercised and the stock piece covered already). Options Net/cushion: $5.75

Exits:

 

StC = Sell to Close

BtC = Buy to Close

Position Updates – 09/27/2014

Since Earnings season has wound down to a trickle I have increased my focus on Swing trading into month-end. I also added a 1/2 size long position in $UGA to the Long-term account. I added 4 new Swing positions this week that survived to the weekend:

  • $CRR I am short at 70.08 and short the October/November 75/60 Strangle (2x on the Puts). I have an Options Net of: $4.58
  • $INVN I am short the October/October 03 weekly 20/21 Diagonal Put Calendar. I have an Options Net of: $.32
  • $JNS I am long stock at 13.44 with a March 2015/October 16/16/13 Collar PS. I have an Options Net of: -$.14
  • $LE I am short stock at 46 with an October 40 Bear Collar. I have an Options Net of: -$1.80

Newly added in the Submarine Basket this week:

  • $GNRC I have an October 42.5/45/40 Risk Reversal Call Spread
  • $TSCO I have a November 60/65/60 Risk Reversal Call Spread

No material changes in the 50/50 Basket this week

Earnings (newly added that survived to the weekend):

  • $AZO I own the October 510/520/530 Call Fly

The Summary:

Positions_09272014

 

 

Option Chain review

It is my opinion that reviewing Option chain data is important whether you actually trade Options or not. The information available in each chain has value that can – and should be – used in your overall Trading Process.

One area I like to research is the Unusually high volume list to see what stands out to me (there will always be something there). I did a quick video on this:

Disclosure: I have positions in $AMAT $CTXS for some clients

Position Updates – newly added this week

Newly added this week that is still on:

$GTAT L Sep/Sep 12w 18/17 Strangle Swap with extra Short September 22/14 Strangle. I am short stock (from 16.12) as a hedge. If price stays under $14 then I will let the stock piece get unwound for me. The short weekly $18 Calls will go poof. This would leave me Long the September 18/22 CS & 17/14 PS. Options Net: $.21

$VNET I am long stock at 14.92 with a September 22.5/21 Collar

$MBLY I have a December 55/50 Risk Reversal in the IRA (replaced $KNDI this week)

$CONN I am long stock at 29.15 and short the September 30 Straddle (Submarine Basket). Options Net: $1.80

$KKD LBW was the original trade. What is left: I am long the September 18/19 1×2 Call Ratio & short the 16 Puts (2x). Options Net: $.70 (Earnings)

$PANW I am long the September 12 weekly 90/95 1×2 Call Ratio with long stock at $95 (hedge). The plan is to let the CS auto-exercise and the long stock will get called away via the extra short $95 Calls – as long as price stays above $95. The short $85 Puts should go poof. Options Net: $.35 (Earnings)

The LBW (Look Both Ways) trade – a review of a Restoration Hardware earnings trade idea

I had offered a trade idea for $RH into Earnings and thought I would list a few potential exit paths to take if you executed this trade. Here was the trade idea:

  • LBW
  • Long the September 85/90 1×2 Call Ratio
  • Long the September 80/75 1×2 Put Ratio
  • At the time I posted the message this trade cost $.60
  • This trade would take margin (at least until the “extra” short Option pieces were closed)

Now that Earnings is done, price has settled around the $78.50 level so the Put Ratio side of the trade is winning. So now what?

For most traders, taking off the Put Ratio is the step they would take. However, it is often the case that price never probes the bottom of the Ratio so leaving the premium to expire is worthwhile.

To help with a visualization of this trade, consider looking at the Put Ratio in a different way:

  • Long the September 80/75 Put Spread
  • Short the September $75 Puts
  • Treat these as 2 separate trades

If you think price holds in this area until expiration then you would sell the Put Spread when you feel it has found a solid floor. You would then place a Stop on the remaining $75 Puts that you are short with the goal of them expiring worthless. You may even be ok with being Put stock at $75. If price does hold in this area, the Call Ratio obviously expires worthless at expiration too.

Your trade, your process.

 

Disclosure: I did not execute this trade before Earnings. I did trade the stock in after hours though – after the report.