July 31 weekly Options expiration

I have 7 existing positions that include Options expiring today. Here’s the plan:

Caterpillar $CAT  I am long the 85/82.5 Put Ratio. I am short stock at $82.5 (hedge). I will let this trade auto-unwind for +2.50 (thus closing this Submarine Basket position). The Options Net final will be: $4.91

priceline.com $PCLN  I own the July 31w/Sep 1160/1230 Diagonal Call Calendar with short weekly $1140 Puts. I will take stock at $1160 with short September $1230 Calls (covered calls). The short weekly $1140 Puts will go poof. Options Net remains: $8.70 and booked stock gain remains: $4.22

Skyworks Solutions $SWKS  I am short the 110/115 Call Spread – which I will let expire. Options Net final: $10.51 and booked stock gain: $2.27

Financial Select Sector SPDR $XLF  I am long the ETF at $25.30 with short weekly $25.5 Calls (covered calls). Current Options Net: $.59. I will adjust to a future expiry

Earnings:

Baidu $BIDU  I am long the 200/210/220 Call Fly and short the $180 Puts. I will adjust the short Puts to a future expiry. The long Call Fly goes poof. Current Options Net: $.69 and booked stock gain: $11.33 (from the hedge)

United Parcel $UPS  I am long the 95/98/100 Call Fly and short the $93 Puts. I will: take stock at $95, adjust the middle of the Call Fly to a future expiry, StC the long weekly $100 Calls. Current Options Net: $.68 and booked stock gain: $1.47 (from the hedge)

LinkedIn $LNKD I am long the 230/240/250 Call Fly and short the $190 Puts. I think this whole trade goes poof today. Options Net: $.79 and booked stock gain: $36.225 (from tag along short in after hours 7/30)

 

– DM 9:00 AM CST

 

Risk Reversal Call Spread (RRCS)

I often receive inquiries on what a RRCS is so I thought I would use a current position in $PCLN to illustrate what it is. The acronym of RRCS stands for:

Risk Reversal Call Spread

The typical structure for this trade:

  • Long a Call Spread
  • Short Puts

Here is what I have for $PCLN in the submarine basket:

PCLN_F_2

– DM 1:00 PM CST

RSI as a trigger

part of the Simple Approach series

I reviewed numerous charts this weekend that have a similar characteristic with $PCLN: intensified buying or selling when RSI hits 30 or 70 respectively. Here is a daily chart on priceline.com to illustrate:

PCLN_RSI

If you are of the camp that history will rhyme for price then $PCLN is at a Buy signal today. If you are not of that camp, what keeps you from believing that this is a high probability trade?

– DM 9:55 AM 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

 

Follow-up on a Trade Idea for Priceline Group

Here was my message on 2/18 via Social Media regarding a Trade Idea for $PCLN Earnings:

PCLN

Here is a closer look at the Daily chart I noted yesterday:

PCLN

A breakdown of the Trade:

  • Long the February 1160/1200 Call Spread
  • Short the February 1200/1050 Strangle
  • This trade could have been done for EVEN
  • This trade takes margin (until the Short Strangle pieces are closed)

With price hovering near the $1210 level today, lets’ take a look at how the Options look:

  • $1160 Calls:  $54.25
  • $1200 Calls:  $15.02
  • $1050 Puts:   $.05

If you don’t want to wait for Friday expiry you can take the trade off near a $25.00 credit.

 

– DM 11:50 AM CST

 

Trading Activity

Canadian Pacific $CP the Buy Stop hit today and I sold the stock for a +$1.72 gain. I have a new Buy Stop in place at the same strike ($210).

Priceline $PCLN I added a tag along stock piece on the $1170 break and sold at 1175.80 (stock piece was today)

Altisource Portfolio $ASPS I had a plan in pre-market action to “buy the dip” but the market said otherwise – it wanted more down first. So I shorted the stock to ride the downside and covered at $56.90 average. Remained on the stalking list for the Submarine Basket. When a bounce started I added a November 60 Risk Reversal for a $1.30 credit

No new Earnings trades today. I considered $NTAP $HP $NTES (see earlier Blog post).