Out of FITB for .12 or 19% profit. Everything else is looking good (except for the SPX hedge--but that's supposed to do that). Also demoting FITB and JBLU off my main list and onto the second. Putting JPM in FITB's place, looking at AMZN, ADSK, CCL, and EA, and NVDA to replace JBLU.
Out of PM on the chart pattern for .45 (but kept the bottom long put leg open). For an astronomical 66% profit (though, in reality, this was 33% of max potential loss because I legged-in to the upper spread of the iron condor). Out of NFLX at .15 for 17% profit. Also on the chart pattern there. Sitting on a BABA credit spread that's $20 OTM...I'll ride that one through expiry rather than pay to close. MSFT bearish debit spread is doing great and looking good for tomorrow. And SPX bearish debit spread is also in good shape. I may close one of these winning hedges today since I'm effectively out of all positions for the week.
Out of MSFT for 1.00 and 134% gain, handily covering the cost of the SPX option that looks like it will be a 100% loser. Assuming both BABA and SPX expire worthless that's a 23% gain for the week. Unfortunately, this ghost came back to haunt me...so overall, not a great week.
Time to dissect another week! Usually I find myself reflecting on risk management and in particular risks I hadn't considered or properly hedged. This week is different, a known risk properly managed. The tech sector moved against the broader market to the extent that it single-handedly held down the S&P. And with BABA, MSFT, and NFLX positions this week, I had plenty of tech exposure. BABA was a winner on luck--we'll never know how it would have looked if it didn't jump 15% on Thursday--though extrapolating BIDU and my other tech exits, I suspect I would have closed Thursday on the chart pattern for a modest gain. I realized today the same chart pattern that got me out of NFLX early (and for some lackluster returns) was the same one duplicated across the tech industry, and indeed in MSFT itself for my decision to hold rather than close and cover the cost of what I expected to be the SPX loser. So, the subjective exits did their work and made two winners that otherwise would have been two losers. I also left some money on the table, which I'm usually not conflicted about when I'm looking at winners, but this one gave me pause. I have clear direction on closing out hedges while they are still hedges--that is, with debit spreads, I hold them till expiration, when I close to offset a realized loss, -OR- until they cross/near the short strike. The rationale being that on a systemic move, these must cover the likely losses on the net short trades, and if the market dips and reverses, I'll get the same reverse on the core position as the hedge. I don't have clear direction on what to do when my core positions are closed and the hedge becomes speculative. Both SPX and MSFT crossed the short strike today, but after I had closed. Had I held to my open positions rule, I would have been eyeing 60% gains this week. The flip side to that is I still made a handsome profit where I expected to lose money anyway. Obviously, it's easy to say in hindsight that was a mistake, and console myself with my "every winner's a winner" mantra. Both exits looked good and disciplined from the perspective of my core positions, but given their intent and virtually reversed logic on closing, I'm not sure how to handle these after outstanding short risk is 0 (or in the case of BABA very near 0). I suspect on the average Friday, I would have been happy to have closed when I did--and this is a rare enough situation that ultimately, I'd be more profitable taking the earlier close. So, I'll think on this one. But to you lurkers out there, chime in and let me know your thoughts on late closing the hedges.
I let the dust settle this morning. Quite confident it's still a bull market after a brief tech correction. So, I'll move gingerly into the market this week, and I'll branch out my hedges a bit to address my fears over the tech sector. Opened AAPL put spread 144-145 for .358 credit SPX put spread 2420-2410 for 2.35 debit (hedge)
Risky trade idea.... but if the bull is alive and well... the VXX $13.50 puts (6/16) right now @.41 should be good for 50% easy. I think the bull is gonna chill for a few days though.