Note: Personal Accounts
It’s that time again, Monthly expiration is upon us for September. I have done some prep & planning work this weekend and here is a look at some of that work:
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:
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
$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)
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:
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:
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.
I have just a few existing positions left that have weekly Options that I need to tend to today:
I wrote a mid-week update here - and only a few changes/adjustments since:
Here is the Summary:
Let’s start with a basic Weekly chart on $MCD:
Now I’ll do some crayon work:
Newly added this week that survived to the weekend:
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:
Here is the Summary for Swing, LT, IRA accounts:
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:
Here is the Summary: