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.

Managing a long-term position within wild short-term price movements

I have a position in my IRA for $KNDI and it has seen a LOT of activity over the past 2 days. Here are the specifics on the trade:

  • Long stock at $18 since 7/16
  • Short the August $20 Calls for 2.00 credit on 07/18
  • I sold the stock piece on 07/23 as it failed to hold the $20 level (very weak on SA article reaction)
  • This left me with naked short Calls

So now what is the move? Let’s review where the performance of the trade is currently:

  • $2 gain on the stock piece
  • $2 option premium collected on the short August calls

I have reviewed the Options chains this morning and have a few paths to consider:

1) Buy August $17 Calls for $2. This would create a long August 17/20 Call Spread. The $2 stock gains would be the profit no matter what happens by August expiration. This would free up the margin use on the Option trade

2) Buy the September $20 Calls for $1.40 debit. This would create a Long Sep/Aug $20 Call Calendar. There would be $.60 in Option net left so a total of $2.60 in profit could be locked in

 

Position Updates

Just a quick review of newly added positions this week along with some exits on new & existing positions:

  • $TSCO Submarine Basket, beat up on guidance
  • $GDP Swing, weakness; a new short on 7/7
  • $GGAL Swing, Argentina; a new long on 7/8
  • $LL Short-term, smashed on prelim guidance in A/H (had already been short during the day) exited
  • $PAM Swing, Argentina; a new long on 7/7
  • $PCAR Swing, VW rumors; a new short on 7/7; added July Bear Collar
  • $TRW Swing, $100 Roll candidate; unusual Call buying noted so tagged along on 7/10 (July 90)

Exits:

 

Position Updates

Noted activity in the my personal accounts

Although this was a holiday shortened week, I was fairly active in the Swing account. Here are the newly added positions this week that survived to the weekend:

  • $ILMN   L July 175/185/170 Risk Reversal Call Spread
  • $VIPS   L August 200/220 Call Spread (LT account)

Exits:

Submarine Basket:

Earnings:

Here is the Summary:

Positions_07042014

 

Position Updates

a look at my Trading activity for my personal accounts

Here are the newly added positions this week that survived to the weekend:

  • $CTRP I am long stock at $56 with short July 60 Calls
  • $BWLD I own a July 160/165/155 Risk Reversal Call Spread
  • $SLB I own a July 03 weekly 110/116/110 Risk Reversal Call Spread
  • $ULTA I own a July 90/87.5 1×2 Put Ratio
  • $VRTX I am short at $102 with a July 90/90/100 Bear Collar Call Spread
  • $BBBY I own a July 03 weekly 56/57 Call Spread
  • $MPC I am long stock at $78.90 and short the July 03 weekly 80 Calls
  • $BKS I am short the July $23 Calls (2x) with a long stock hedge at $22 (and a Stop at 22.50)

Exits this week:

Earnings:

Submarine Basket:

Here is the Summary:

Positions_06272014

Bullish Engulfing

If you are new to trading you may be scared by this term but fear not. The Bullish Engulfing candle simply means that the current candle range exceeds the prior trading day candle – so it “engulfs” the prior price action.

To illustrate this I bring you the Daily chart of Schlumberger Ltd ($SLB):

SLB_B

This powerful up move today is also confirmed by very solid volume. Congrats to those that are long.