Long-term Account update

No new positions this week but have a few existing positions that saw activity ($AVGO $WBA):

Avago Tech $AVGO  had a great Earnings report, big move up to near the $130 level. I am Long stock at $105 (since 2/2) with Short July $125 Calls (covered calls that I adjusted this week)

Electronic Arts $EA  I am Long stock at 41.40 (since 11/18) with Short Jan 2016 $55 Calls (covered calls)

iShares Micro-cap $IWC  I am Long the ETF at $74 (since 1/16) with Short June $78 Calls (covered calls)

Precision Castparts $PCP  I am Long the March 200/220 CS and 190/180 PS

Qualys $QLYS  I am Long the stock at $38 (since 2/4) with a June/Mar Collar Split Put Ratio (S June Calls, L Mar Split Put Ratio to protect stock)

Resmed $RMD  I am Long the Mar/Apr 65 Call Calendar with Short April $55 Puts

Walgreens $WBA  I am Long at $70 with an Oct/Apr 80/80/70 PS (adjusted this week, moved 2 strikes UP)

 

- DM 10:10 AM CST

 

Submarine Basket update

American Express $AXP  Long the March 06w 78/80/77 RRCS. I will likely take stock next week at $78 and sell Call premium further out to BtC the Short $80 Calls

Bed Bath & Beyond $BBBY  Long stock with an April/Mar 13w 75/77/72 Collar PS

Baidu $BIDU  I am Short the March 06w 215/195 Strangle

BorgWarner $BWA  I am Long stock at $51.40 with Short March $57.5 Calls (covered calls)

Expedia $EXPE  Long the March 06w/July 77.5/87.5/76.5 RRCS

Fossil $FOSL  I am Long stock at $85.01 with a March 06w 87/85 Collar (new this week)

Panera Bread $PNRA  I am Long stock at $153.60

Rentrak $RENT  I am Long stock at $52.40 with a March 60/55/50 Collar PS

 

Exits:

Dunkin $DNKN

Workday $WDAY  I was Long stock at $84.90 (new trade this week) but it hit a Stop at $88.60 today. I will revisit (likely using Options)

 

- DM 9:00 AM CST

 

IRA account review

I have some capital available to put to work in the IRA as I have only 3 open positions (normally have 5-6):

  • $ACHN  I am Long the March 14/18 CS
  • $CYBR  I am Long stock at $40 with a Diagonal Collar PS
  • $MAR  I am Long stock at $59.50 with a Diagonal Collar PS

Note: there have been no material changes to these positions this week. You can review my Position Updates post each weekend to keep a historical look at my trading.

 

- DM Noon CST

 

Swing Account review

No new positions this week. A few existing positions that have seen activity this week: $FB $SWKS. Here are the 6 positions:

  1. $FB  I am Long the March 13 weekly 79/80 CS. Options Net is: $1.16
  2. $SSYS  I am Long stock at $55 (since 2/13) and have a March/March 13w $65 Collar. Options Net is: $1.71
  3. $SWKS  I am Long stock at $63 (since 12/05) and have an Aug/Mar 85/80/75 Diagonal Collar PS. Options Net is: -$.68
  4. $UNP  I am Long stock at $113 (since 01/23) with Short January 2016 $120 Calls (covered calls). Options Net is: $2.08
  5. $URI  I am Long stock at $90 (since 2/11) with a March 95/90/82.5 Collar PS. Options Net is: $8.47
  6. $UVXY  I am Long the ETF at $24.64 and Short the March $30 Calls. Options Net is: $5.65

 

- DM 12:05 AM CST

 

How an IV “crush” works starring MercadoLibre

For those that don’t trade Options this may not interest you unless you like strategy reviews. In the case of $MELI I wanted to sell the elevated Option premium for Earnings and use stock (if need be) to hedge if price got anywhere near my short strikes.

Here was the trade:

MELI_Earnings

With a credit of $12.65 I have a substantial range to work with:

$147.65 to the upside
$117.35 to the downside

I elected to use $140 and $131 as my levels to hedge with stock (if need be). So far I have not needed to hedge. This trade was done with an exception to my 1st week rule.

 

- DM 9:15 AM CST

 

Earnings Trades update

New this week that is still on:

Home Depot $HD  I am short the February 27 weekly $117 Calls

Boston Beer $SAM  See recent Blog post for more details. I am Long the March 260/280/250 RRCS with a Sell Short Stop set at $265 (would be an anticipatory hedge)

MercadoLibre $MELI  I am short the March 135/130 Strangle

 

Exits:

 

- DM 9:05 AM CST

 

A bottom of the barrel look at Boston Beer

SAM

Yikes.
I posted the above chart after I initiated a Short Stock position (2nd trip short stock, post-Earnings). I was looking for a B/O back-test to the $253 area noted on the chart.

It nearly got there as the low for the day is $253.01 (I have covered at $254.70 average). I will be looking for a U-turn Long now for some bounce — will use Options.

 

- DM 9:40 AM CST

 

Trading Activity

Bed Bath & Beyond $BBBY  I have adjusted the Short March 13 weekly $74 Puts down to the $73 strike. Now have a Long 77/73 PS to protect the Long Stock piece (part of a Diagonal Collar PS with May Options). Options Net shrinks to: $.30

Home Depot $HD  I sold the Long Stock piece today at 117.18 (hedge). I adjusted the Short weekly $116 Calls up to the $117 strike. Options Net shrinks to: $2.91 and stock gains improves to: $2.33

 

- DM 9:30 AM CST

 

Trading Activity

Home Depot $HD  I initiated an Earnings trade on 2/23: Long February 113/115/108 RRCS. I added a Long Stock piece in P/M on 2/24 at $116.10 and sold this at $117.25 on 2/24 (a tag along trade). I have BtC the $108 Puts, StC the $113 Calls, and adjusted the remaining Short $115 Calls up to the $116 strike. Options Net is now: $3.26 and stock gains of $1.15

Fossil $FOSL  Long stock at $85.01 and added a March 06w Collar for a .09 debit (Submarine Basket)

 

RRCS = Risk Reversal Call Spread
BtC = Buy to Close
StC = Sell to Close

- DM 9:30 AM CST