Position Updates

My focus for new trades continues to be on Earnings trades so there is limited activity in the normal Swing, Long-term, or IRA accounts. I did close $INCY & $VRTX in the Swing account this week. The only material changes in the LT or IRA accounts:

  • $MAT  I am Short the February 28/25 Strangle with a Buy Stop set at $27.90
  • $URI  The Sell Short Stop (SSS) did trigger on 1/30 (this is a hedge)
  • $EA  I adjusted the Short Calls up/out post-Earnings
  • $ACHN  I created a March 14/18 CS (was already Long the $14 Calls)

50/50 Basket: no positions

Submarine Basket:


Here is the Summary:




Tractor Supply – a look at an existing position into Earnings

I have had a position in $TSCO for the Submarine Basket since 09/25/2014. Here is the current position info:


I received a few comments today about letting the Long stock position stay “capped” into Earnings. If you review the chart above, you can see that my priority should be to protect the recent gains. It has had quite an UP move from the October lows so it is my view that the risk may be to the downside now.

If I am wrong? No harm no foul. I can sell premium in a future expiration to buy back the Short $80 Calls at February expiration. The Put Ratio would go poof.

Worth noting: I have an Options Net of $1.10 & accumulated booked stock gains of $7.07 up to this point.


- DM Noon CST


Trading Activity

Caterpillar $CAT  I have StC the January 30 weekly $80 Puts thus leaving the Short weekly $79 Puts. Options Net improves to: $2.97 & stock gain remains $.57

Illumina $ILMN  I have StC the January 30 weekly $200 Calls thus leaving the Short $215 Calls. I set a Buy Stop at $210 (would be a hedge). Options Net improves to: $15.44

Polaris $PII  I adjusted the Buy Stop to $147.50

Yahoo $YHOO  I went Short stock in A/H on 01/27 at $51.88 and have covered 1/2 today at $49.02

Radware $RDWR  Had a great Earnings report but was sold off anyway. On the pullback I got Long stock at $19.02 and set a Stop at B/E. I have since added a Long Feb/Mar 20/21 Diagonal Call Calendar for a .15 credit (Short March Calls can be viewed as covered by stock if need be)

Incyte $INCY  The Long stock hit a Stop at $83.40

Vertex Pharma $VRTX  I have unwound the RRCS due to weakness into Earnings. Options Net final: $3.68 & stock gain remains $2



StC = Sell to Close

- DM 9:30 AM CST


Position Updates

New this week that survives to the weekend:

  • $UNP  I am Long stock at $113 and Short the January 2016 $120 Calls
  • $FXCM  I am Long the February $2.50 Calls (IRA)
  • $BWA  I am Long stock at $51.40 with a February $55 Collar
  • $LYB  I am Long the February 80/85/90 Call Fly and Short the $72.5 Puts
  • $UPS  I own the February 06 weekly $103 Risk Reversal

50/50 Basket:

No positions


see Blog post from Friday afternoon 01/23

Submarine Basket:

see Blog post from Friday 01/23


Here is the Summary:


- DM 9:30 AM CST


Long-term account update

No new positions this week. Material changes to existing:

Avago Tech $AVGO  No changes

Electronic Arts $EA  I adjusted the March Options to the Short June $50 Calls on 01/22

iShares Micro-cap $IWC  I recorded the .289 dividend that was paid on 12/24

Precision Castparts $PCP  No changes

ResMed $RMD  I switched from a Long Stock trade to a Long April 60/65/55 Risk Reversal Call Spread on 01/20

Walgreens $WBA  No changes


- DM 1:50 PM CST



Trading Activity

Reminder: The activity noted here is in Personal Accounts unless I specifically note a trade is/was for clients.


BioMarin Pharma $BMRN  The Long stock piece hit a Stop on 01/21 leaving me with Short February $100 Calls. I elected to add additional Option pieces for February to create a Call Fly. Options Net shrinks to: $4.89 and stock gains: $5.84 (Fab 5)

United Rentals $URI  I am Short the March $82.5 Puts (2x size). I went Short stock post-Earnings on the $90 break

F5 Networks $FFIV  I am Long stock at 108.35 (post-Earnings Dip Buy, 1.5x size). This hit a Stop at $113.75 for +$4.82 so the position is now closed

SanDisk $SNDK  I have StC the January 23 weekly $80 Puts. The Long weekly $80 Calls remain as well as the Short March pieces (1/2 size on these). Buy Stop is set at $78 (would be a hedge). Options Net is now: $4.81


StC = Sell to Close

- DM 10:00 AM CST



Some perspective on Union Pacific

One of the important aspects of trading is technical chart review. Even if you don’t agree – perhaps you only trade on Fundamental data – the review of a stock chart gives you perspective on what ALL market participants think.


With that in mind, I took a few minutes to review the Daily chart of $UNP with a few different perspectives:



- DM 9:00 AM CST


ETF Short strategy starring TNA TZA FAS FAZ

I got asked recently about the ETF Short strategy that I do involving $TNA $TZA and $FAS $FAZ pairs. It has been a while since I have had these trades on but thought I would do a quick review of the goal of the trade as well as show some current performance info.

First, the goal of the trade if to be short each ETF and manage them as a pair. You could use Options as the initial trade or in conjunction with the ETF. The point it to capture decay even as price whipsawed around.

Now on to some performance metrics. In January 2013 the $TNA $TZA pair traded at $69.61 & $12.29 respectively. The Friday close in each: $71.74 & $12.76. Basically flat now after 2 years. It is likely that the only way you made money – if still holding this trade – was to sell Option premium along the way against the Short trade.


For $FAS $FAZ in January 2013 the pair traded at $133.20 & $13.50 respectively. The Friday close in each: $112.44 & $14.12


- DM 10:00 AM CST


Position Updates

The focus this week was in managing existing positions that had January monthly Options as part of the trade. One of my oldest positions was closed this week: $AIG (long-term account). I did add a few new positions:

  • $PCP a RRCS for the long-term account
  • $FMI a short for the Swing (has a Bear Collar)
  • $FXCM a short for the Swing (exited in A/H 01/16 as it was finally un-halted)
  • $RMD a long stock position in the long-term account
  • $FDX a new long in the Submarine Basket (a revisit after exiting a position earlier in the week).

There are no positions in the 50/50 Basket.

I end the week with just one Earnings trade: $SLB.

My $VXX related trade is a Long $UVXY position I have had since 01/02/2015 (so, no $VXX weekend trade this week).

Submarine Basket:

  • $AGCO
  • $BBBY
  • $DNKN
  • $FDX
  • $TIF (this is a short-term Short Stock trade as it probes for a solid bottom)
  • $TSCO
  • $KR (trade still on but has been an official SB position since 08/18)

Here is the Summary:


- DM 11:00 AM CST


IRA account review

I have 5 positions in the IRA:

$ACHN  I am Long the March $14 Calls

$CYBR  I am Long the February 40/45/50 Call Fly

$DVA  I am Long stock at $54 (since 10/11/2012) and Short the January 2016 $72.50 Calls (covered)

$INTC  I am Long stock at $31.50 (since 07/14/2014) and Short the February $34 Calls (covered)

$MAR  I am Long stock at $59.50 (since 05/29/2014) and Short the January 2016 $70 Calls (covered)


- DM 1:00 PM CST