The Down Channel

During stock research this morning I noticed this well-defined Down Channel that has formed in $ITW:

ITW_D

Now that price has begun to arm wrestle the 200 SMA I will be watching for a move down to the $90.50 level. An ideal trade here would be a Put Ratio in my opinion.

– DM 10:05 AM CST

 

Following footprints starring Manulife Financial

On May 28th I noticed a very unusual trade in the September option chain involving the $18 Calls. Due to the enormous “footprint” left by a trader I elected to tag along with my own trade:

Bullish Risk Reversal:  long the September $18 Calls and short the $17 Puts

This trade was done for a -$.80 debit and take margin

The stock is trading near the $19.5 level today and I thought I would comment on a couple of key points for the trade:

1) The strategy is a simple one: keep an eye on large Option trades and determine the probability of success based on defined criteria

2) Make your own trade if you are going to tag along. Don’t just follow blindly

3) As is the case with every single trade, know your Risk and manage it. In my case I have be sure I am ready to hedge with stock if price gets anywhere near my short Put strike

 

– DM 9:10 AM CST

 

June OpEx status

06192015

I did a brief post here over the weekend regarding the positions that needed tending to for the June Monthly options expiration this week. The above list contains positions that are left to deal with.

– DM 9:00 AM CST

Earnings preview for Adobe and FedEx

Weekly charts

ADBE_B

I like the June 80/82.5/85/75 Risk Reversal Call Fly for an ADBE earnings trade (long the 80/82.5/85 Call Fly and short the $75 puts).

FDX_weekly

I have an existing position in FDX but for an earnings trade consider this:

Long the June 182.5/185 Call Spread
Short the June 177.5 Puts
Cost: $.20 credit
Takes margin

– DM 10:40 AM CST

 

Monthly OpEx – June

It is time to prepare for expiration of monthly Options – for June. Here are existing positions that I will need to tend to by Friday 6/19:

Swing account:

$IACI  I own the 75/70 Risk Reversal

$LNKD  I am long at $200.04 and short the $215 Calls (covered calls)

$RENT  I am long with a 70/65/55 Collar Put Spread

$SWKS  I am long the $101 Calls (have short June 26w $105 Calls as other part of a Diagonal Call Calendar)

$WM  I own the 50/48 Risk Reversal (needs help to get the Calls ITM)

Long-term account:

$EA  I am short the $50 Puts

$IWC  I am long at $74 with a 78/78/73 Collar Put Ratio

$PCP  I am short the $200 Puts (long the September $250 Calls as other part of a Risk Reversal)

$QRVO  I am long at $76 with a 85/80/75 Collar Put Ratio

IRA:

none

Submarine Basket:

$BWA  I am long at $51.4 with short $60 Calls (covered calls)

$HSY  I am long the 95/100/105 Call Fly and short the $90 Puts

The Fab 5 ($100 Roll):

$DTV  I am long the $94 Calls

$PNC  I am long at $92.4 and short the $95 Calls (covered calls)

Earnings:

$TWTR  I am long at 41.99 and short the $45 Calls (covered calls)

$BIDU  I am short the $200 Puts

$ZBRA  I own the 95/100/85 Risk Reversal Call Spread

$ADSK  I am short the 60/62.5 Call Spread and $52.5 Puts. There is a Buy Stop set at $56

$WSM  I am short the 82.5/72.5 Strangle

$ROST  I am short the $95 Puts

$TIF  I am short the $95 Calls (2x) and long the $100 Calls. I am also short the $80 Puts

$ULTA  I am short the $165 Calls (2x) and long the $170 Calls. I am also short the $140 Puts. Buy Stop set at $157

$PVH  I own the 110/115/120 Call Fly

$GIII  I am long the 60/62.5 Call Spread

$RH  I own the 95/100/105 Call Fly and short the $85 Puts. I have booked stock gains of $3.68

 

– DM 9:00 AM CST

 

Trade update in Puma Biotech

I have a position in the Submarine Basket for $PBYI. Here are the details:

I owned the June 05w/September 180/225 Diagonal Call Calendar

This takes margin

On 6/1 I StC the June 05w $180 Calls for a $9.50 credit

By selling the $180 Calls I was left with the short September $225 Calls. I set a Buy Stop at $185 on 6/1. I lowered the Buy Stop to $150 on 6/3. I lowered the Buy Stop to $138 on 6/8.

It seems that I’ve missed a real opportunity to capture the DOWNSIDE move:

PBYI_B

What is challenging with trading a basket of stocks is when you have one criteria for entry: pullback to Support. What happened here is I was positioned for an UP move and although I was able to sell the long Calls for a gain – I missed the REAL opportunity in the $70 move down from $200. I was too focused on the short Calls and kept lowering my Buy Stop. I should have also had a Sell Short Stop (which I do often).

– DM 9:20 AM CST