May 22 weekly OpEx

I have several existing trades with May 22 weekly options as part of the trade. Here is the plan:

$CRM  I own the July 75/82.5/67.5 RRCS. I am long May 22w $67.5 Puts (these will go poof). Options Net: -$1.50 and booked stock gains of $9.45

$WDC  I am long stock at $92 with a 99/98/92 Collar Put Ratio. I will let the long $98 Puts exercise and unwind the stock for +6.00. Final tally: Options Net: $2.12 and a stock gain of $6.00

$Z  I am long stock at $82.96 with a $97 Collar. I will let the long $97 Puts exercise and unwind the stock for +14.04. Final tally: Options Net: -$.78 and a stock gain of $14.04

$XLF  I own the July/May 22w $25 Call Calendar. I will adjust the short Calls to June 05w $25 Calls & take in a bit more premium. Options Net: -$.31

$AXP  I own the 78.5/80/76 RRCS. I will take stock at $78 & adjust the short $80 Calls to a future expiry on 5/22. The short $76 Puts will go poof. Options Net: $.57

$CAT  I am long stock at $85 with a 88/87/84 Collar Put Spread. I will adjust the CPS to a future expiry. Options Net: $.18

$CTRP  I am long the May 29w $65 Straddle & short the May 22w $65 Puts (these should go poof today). I am also short the September $80 Calls. Options Net: -$.64

$HD  I am short the 116/118 CS & $109 Puts. All these pieces should go poof. Options Net final: $2.03 & stock gain: $.93

$NTAP  I am short the 32/31 Strangle & long stock at $31.50. My current plan is to short a Strangle in a future expiry & take in more premium. Options Net: $.73

Positions for clients left to tend to:  $XLV $GILD $V $WFC

 

– DM 8:35 AM CST

 

Review of Salesforce.com as it heads into Earnings

I have an existing position in $CRM where I have done a few tweaks today. Here is the trade coming into this morning:

I own the July 75/82.5/67.5 RRCS (Risk Reversal Call Spread)

This morning I added a short stock piece on the break of $73. I have since covered this for a $3.16 gain. I have also added long May 22w $67.5 Puts for a -$.90 debit (protects the short July Puts). The Options Net is now: -$1.50

So in summary, the trade looks like this into Earnings:

  • Long the July 75/82.5 Call Spread
  • Short the July/May 22w $67.5 Put Calendar

 

– DM 2:30 PM CST

 

 

Pricey Stocks

One of the scans I do frequently involves what I term as “pricey” stocks. These companies have a share price that is over $100 a share. This doesn’t mean they are expensive or over-priced. Currently I have 273 tickers that meet that criteria (as well as my Avg Volume criteria):

Pricey_stocks

Courtesy of Finviz

Interesting to see after a day of trading, many show very little movement from the yesterday (5/18) close.

– DM 4:20 PM CST

 

Quick Sand?

One of the more common trade setups that I look for is a pullback to Support. Here is a Daily chart on $LVS that shows a dip into the Support Box this morning:

LVS_B
Note the mild RSI divergence as price makes a new low versus the March low. It is also worth noting however that the CMF has made a new low versus the March low.

– DM 9:15 AM CST

 

Look Both Ways

Sometimes I see a chart that clearly shows the potential to make a move in either direction. I noticed this potential in $BWLD today with the 2 Gap Fill areas:

BWLD_C

So, how about a trade idea? This is one approach to consider:

  • Long the September 175/140 Strangle
  • Short the December 175/140 Strangle
  • This is called a Strangle Swap
  • Cost: $7.70 credit (that’s right, get paid)
  • Pro: protected until September expiry on any sudden UP or DOWN move beyond the chosen strikes
  • Con: takes margin

Some scenarios to consider:

1)  Price is $185 at September expiration. The long Sep $140 Puts go poof. Take the stock at $175. Now plan for adjusting the short December $175 Calls any time before the December expiration. If the short December $140 Puts are real cheap, BtC

2)  Price is $135 at September expiration. The long Sep $175 Calls go poof. Take the stock short at $140. Now plan for adjusting the short December $140 Puts any time before the December expiration. If the short December $175 Calls are real cheap, BtC. Might want to consider buying Calls to protect the short stock too, use some of the credit

– DM 1:00 PM CST

 

Position Updates

Due to an increasing amount of questions and comments regarding my positions & trading I recently created a new tab on the Blog for recording my Positions. The goal is to update the info on each account or basket daily for any changes that occur.

Newly added this week that survive to the weekend:

$RENT $WM $XLF $PFE $GMCR $YUM $ZBRA $CTRP

Exits:

$MNST $QLYS $RMD $RL $PTBI Earnings: $CNC $TMO $ORLY $EW $BWLD $NXPI $HAR $EL $RGR $MCK $KSS $LOCO $KING

Here is the Summary:

Positions_05162015

– DM 10:00 AM CST

 

A trade review starring Resmed

Although I no longer have a position in $RMD I thought it would be helpful to review the trade info given the severe weakness today – and how an Option Collar would have helped tremendously if still in the trade. Here are the specifics for the position I closed on Monday:

  • Long stock at $65 (since 3/20, long-term account)
  • Short the October $70 Calls (covered calls)
  • Long the May $70 Puts
  • The 2 option pieces created what is called a Collar

Here is a Daily chart to show the plunge down to $55:

RMD_B

If I still had this trade I would be down $10 on the long stock piece. So, lets’ see how the Option pieces look now (the Collar, the long stock protection):

The October $70 Calls have a bid/ask of:  $.30/.65
The May $70 Puts last traded at:  $14.50  (bid/ask:  14.60/15.10)

– DM 2:00 PM CST