Position Updates

Newly added this week that survived to the weekend:

  • $IRF  I tagged along in the September 30 Calls on the M&A rumors (deal was eventually announced later in the day). Options Net: -$.72
  • $MNST  A “to fade” setup. I am currently short the Oct/Sep 85 Put Calendar. Options Net: $1.05
  • $VXX  I am long the ETN at $27.90 and short the August 29 weekly 28/27.5 Strangle. Options Net: $2.05
  • $JRJC (50/50)
  • $PBYI (50/50)
  • $HAIN (Earnings)
  • $INTU (Earnings)
  • $RDEN (post-Earnings)
  • $ROST (Earnings)
  • $SMTC (Earnings)

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:

08232014

Here is the Summary for Swing, LT, IRA accounts:

Positions_08232014

Position Updates – 08/09/2014

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:

Exits:

Submarine Basket:

50/50 Basket:

Here is the Summary:

Positions_08092014

Options Expiration day – a look at Pioneer Natural Resources

For those familiar with Option trading you will find the following graphic of no surprise:

PXD_Aug08w_Options

Bid/Ask spreads. Ugh.

I am currently short the $230 Calls (2x, left over from a Call Ratio) and short the $205 Puts. One of the challenges on expiration day is to have the patience to let the bid/ask spread tighten so that you can close an Option in a reasonable way.

At the moment price is above $206 so the short Puts are OTM (out of the money). I obviously would prefer to not pay to buy them back (BtC – Buy to Close) and instead have them expire worthless. It seems the short Calls above will have no problem doing that :)

Position Updates mid-week review

Newly added this week that still remain (or the remaining pieces):

  • $ELLI I am long stock. Swing
  • $REGN I am long the August 08 weekly 315/335 Call Spread. Swing
  • $WYNN I have an August 08 weekly 202.5/205/197.5 Risk Reversal Call Spread. I am short stock as a hedge on the Puts. Swing
  • $TGT I am long stock at $58 (1/4 size) and short the August 59/58 Strangle & August 08 weekly 57.5 Puts (1/4 size of each). Submarine Basket
  • $PXD I am short the $230 Calls (2x) and $205 Puts. I am short stock as a hedge on the Puts. Earnings
  • $FSLR I am long the August 64 Calls and short the August 08 weekly 52.5 Puts. Earnings
  • $ATVI I am short the August 08 weekly $24 Calls (2x) and long the 22/21 1×2 Put Ratio. Earnings
  • $Z I am long stock at 134.72 with an August 145/140/130 Collar Put Spread. Earnings
  • $CF I am short the $260 & $265 Calls as well as short the $242.5 Puts. Earnings

 

Position Updates – 08/02/2014

We ended July with a big RED day and have started out August with a lot of continued indecision along with more distribution. I focused mainly on Earnings trades this week but did find a few opportunities for the normal accounts. Newly added that survive to the weekend:

  • $PCYC (a new trade this week in the Swing account)
  • $GRMN (Submarine Basket)

Exits this week (including newly added that did not survive):

50/50 Basket:

Submarine Basket:

08022014

Earnings:

Here is the Summary for Swing, Long-term, IRA accounts:

 

 

Positions_08022014_B

A look at Bear Collar protection starring my Sodastream trade

I often like to discuss a trade topic using a real live trade and thought I would highlight the current $SODA trade I have on. Here are the specifics:

  • I am short stock at $36 from 07/24 in the Swing account
  • I own an August 01 weekly $31.5 Bear Collar
  • Options Net: -$.83

Now that the Earnings event is over let’s take a look at the Daily to see where price is:

SODA

So far a nice bounce with the 50 SMA just above to offer some resistance. So how is the Bear Collar helping my position? Let’s see how the Options are priced right now:

  • The short $31.5 Puts are OTM now, last trade was $.30
  • The long $31.5 Calls are several strikes ITM now, last trade was $1.43

So the short stock piece is protected on any gain in price above $32.33 (31.5 Call strike + .83 the current Options Net). This locks in a gain of $3.67 (36 – 32.33).

 

 

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.

Position Updates

This was a very typical Options expiration week with a few surprises along the way to my Plan posted last weekend. Aside from the focus on existing positions with July options, I did manage to add new positions that survive to the weekend: $CHL $INTC $KNDI $JPM $SWKS $CBI $GNRC.

Exits (primarily due to July Options expiration plan):

Earnings:

07192014

50/50 Basket:

Here is the Summary:

 

Positions_07192014

The Volume Bar buy signal

part of the Simple Approach series of blog posts

For traders that like to trade with simple triggers you may find this of interest. I use RSI and Volume Bars as Buy/Sell triggers and so I like to offer examples to show what I mean.

For an example using Volume Bars as a Buy signal I bring you $CAB:

CAB_volume_bars

As you can see above, I highlight several Buy points (blue vertical line). Here are the details:

1) Buy the next green Volume Bar – after at least 3 Red bars in a row

2) There have been 6 triggers so far with #7 in the works now

3) Use your own Stop and/or Risk parameters for exiting each trade that you would take

4) Trigger #4 is likely a loser

 

Position Updates

I did an update earlier this week summarizing the trading activity this week here and all the newly added positions survived to the weekend (exception is $LL but I already noted that it was exited).

Submarine Basket:

Earnings:

50/50 Basket update was done on the blog Thursday. No material changes on Friday.

Here is the Summary:

Positions_07122014