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Beer & Options Journal

  1. Starting a new trading journal. I have previously shied away from posting a live trading journal under the presumption that it would introduce my ego into the risk / reward equation, and while that presents a monetary risk, it doesn't come with a monetary reward. Though, as I reviewed the trades I have made live calls on, I've noticed they're much better from a technical standpoint; specifically, I do a much better job of getting out of bad trades. So, apparently, there may be a monetary reward side to this. So lets experiment and see how this one goes.

    Currently, open positions are:
    AAPL - Jun 16 long $155 call
    BIDU - May 19 call debit spread 182.50 - 187.50
    CAT - May 12 put credit spread 98 - 100
    FDX - May 12 put credit spread 187.50 - 190.00
    MO - May 12 put credit spread 69.00 - 71.50
    QCOM - May 12 call credit spread 53 - 55

    Going forward, I'll show open / close transactions--I'll give the damage reports on the above as their closed.
  2. Stopped out of MO at 1.40 for a 0.16 loss.

    That is something I didn't think I'd ever say.
  3. Ugh...so today was an unmitigated disaster. Well, I guess the nicest thing I can think to say about it is that it was a mitigated disaster in that I was saved by the diversity of the positions. But seriously, 15% in realized losses today. Had this been during my first trading week of the year, I would be out of the market until I had another cash infusion that I could put up.
  4. Stopped out of APPL this morning at 2.32 (was long from 3.00). 23% loss there.
    Dumped FDX on chart weakness-- 0.32 loss on that one.
    Closed QCOM at .20 (opened for .71) which undid the losses on both of the above.

    All else is looking good, and well on the way to recovering from yesterday as I suss out new positions!

    Watching BIDU closely, but this is still looking like a healthy bull. Have a contingent order in place to close as a winner.
  5. Watching DAL and MU for a bearish reversal. Still ultimately bullish, and only about 20% exposed at the moment...need to find some other positions to get into. Not seeing a lot today.
  6. V May 12 put credit spread over 91-92 for 0.21
  7. Closed out the top of the BIDU spread for the same price I opened, so just long 182.50 call.

    Also, had open positions on SNAP for some time in anticipation of tonight's release. Long on both $25 (Jan) and $27 (May 12) calls. I guess the best way to say it is that I'm long on market irrationality.
  8. MSFT credit May 12 put spread open over 68.50 - 69.50

    Edit: Oops, at 0.33
  9. That went south in a hurry...
  10. Today exposed a serious crack in my risk management--previously unforeseen, and inadequately managed. So, it's time to hit the pause button and reevaluate. The account was savaged this week and is down about 40% from last week. Though, some perspective here, I'm still sitting on 60% gain YTD (excuse my contrived optimism on this point...)

    The situation:
    1. After substantial gains this year I increased position size. This was the first week of the larger positions.
    2. After taking losses early this week on positions, I stopped out, and put the money back into the market.
    3. I make earnings trades with profit from the proceeding week.
    4. A systemic move today affected all of my positions.

    Each of these was a previously considered risk, and appropriately managed. The shortfall in managing this risk was putting the money from the closed losing position back into the market (and to a lesser extent, trading earnings). But that problem was magnified because of the other items. Because that loss is managed by already open positions, a new loss with a new position cannot also be managed by the open positions (see MSFT trade--which blew past my stop today). That is to say, once the loser has stopped out, the winners that are open against it cannot support the risk of another position. Corrective action: when stopping out of a loser, that money cannot be reintroduced to market unless offset by a winner (and specifically, a winner that is 30% greater than the loser).

    I've realized that position size must be stepped up over a series of weeks to prevent a single bad week from wiping out more than 1 weeks gains. Earnings trades are compatible with my strategy only to the extent that they are done with a small percentage of gains realized that week.

    Particularly because of the 100% step-up in position size compared with last week, this was a particularly expensive lesson. We saw the perfect storm this week and paid for it...so time to pick up the pieces and move forward.

    The damage report:
    MSFT - still open as we're sitting at 95% of the spread--another take-away here is that the price exposure on this was relatively high due to late week opening (i.e. a 0.30 premium on Monday is not the same as a .30 premium on Wednesday with a Friday expiry). Little left to recover here and we're staring down a 100% loss of at-risk (which is about 2x expected gains on my positions).
    V - Looked bad this morning, but looking just fine right now. Good chart pattern after bouncing off of moving averages. We'll let this one ride through tomorrow (barring a good gain or stop today)
    BIDU - closed at 3.25 (opened at 2.67) - jumped ship early on this one, but still walked away with 21% gain (though because I managed risk by closing a spread asymmetrically with the short leg breaking even, this was nearer a 30% gain in reality).
    CAT - closed at 0.17 (opened at 0.66) for a 37% gain.

    I'm revising my trading plan based on lessons learned (and also because I've strayed from it a bit--which cost me). I'll probably put that up here later today or tomorrow.
  11. MSFT closed at .89 to recover .11 before it evaporates too. 92% loss.

    To add insult to injury, I accidentally placed the opening order backwards yesterday as a debit spread before reversing it (that my net credit wasn't filling on the bid probably should have clued me in before I fired it off as a market order). Had I been 2 mins later, I would have picked up 0.10 gain immediately. Had I held it overnight, I'd be eyeing 82% gains (the difference here to above is 2 extra spreads and commissions).

  12. V closed at 0.18 for a 12% gain. I still like this position, but while I pause to reevaluate, the risk of keeping this open stand-alone does not justify the 0.82 net of spread if it hits the fan tomorrow.

    Account is fully liquidated no while I reevaluate how to proceed.
  13. Lots and lots of opportunities today. All May 19, all credit spreads:

    DAL 49.50 - 50.50 call spread - 0.30 credit
    MU 29 - 30 call spread - 0.26 credit
    NFLX 157.50 - 160 put spread - 1.13 credit
    PM 109 - 111 put spread - 0.36 credit
    V 91.50 - 92.50 put spread - 0.40 credit
  14. Nothing but good news to report today. And my first day in more than a month without an order (which is a good thing!)

    MU, PM, and V are all continuing their win streak. NFLX was close to flat (slightly down), but still well in winning territory. Settling in on $160 resistance--a condition I hope to will continue until Friday afternoon. DAL moved the wrong way and the position is pretty close to flat.

    Up 4% of at risk today and 10% of account value since opening positions on Friday.

    Watching the nervous looking bulls on the sides of DAL lest they trample me. Watching NFLX for a volume jump with price moving in the wrong direction. Other positions all quiet.
  15. PM closed for .06
  16. Looking to get back into flavor country with MO 70-71 put spread around .25
  17. MO was right there but never filled. Opened a credit put spread on MSFT over 68-69 for 0.32. Also, 23% was the win on PM.
  18. Closed V on the chart pattern for 0.22 (quite miffed at this. I should have gotten at least a partial fill at .21). 27% return
  19. Filled at 0.24
  20. Rolled the DAL position down to 48-49 for a 0.32 credit.
    And stopped out of MSFT at 0.45.

    Looking good on MO, looking at MU currently, letting NFLX ride in hopes of a recovery since it's pretty much worthless anyway.
  21. Out of MO at .38

    Rolled MU down to 27.5-28.5...said .41 credit, but on phone, need to double check that
  22. So, my phone's order status did indeed say executed at .41 credit, but execution was in fact the price I entered at .31 everywhere else I look. Can't even figure out where that .41 may have come from...the prices don't even add up to that:

    0.51 credit
    0.15 debit
    0.07 debit
    0.02 credit

    25% gain on MU
    28% gain on DAL
    23% loss on MO
    27% loss on MSFT

    Score one for hedging! I'm sitting on realized gains this week approximately equal to unrealized losses. Looking for a bullish hedge against my MU and DAL positions to keep the world in balance...not seeing a lot.
  23. Oh, found it! AAPL 150-152.50 put spred. .82 credit
  24. *sigh* and out at 1.05
  25. Watch SJM on pullbacks. I picked up some last week just north of $124. This one should be a good long term play. Its got everything going for it in this environment. I also suspect the rise of M&A activity in the sector. $125.25 as I type. If you're patient you might be able to get in at $124. 55... will be much higher this time next year. Its a well run company. Their footprint is everywhere. http://www.jmsmucker.com/smuckers-corporate/jm-smucker-brands
  26. Out of MU at .49.

    AAPL was 16% loss
    MU was 25% loss
  27. Hmmm, interesting. They're not in my stable, but they do look quite impressive. Less liquidity than I'd like to see.

    Moot point anyway. I'm letting DAL and NFLX ride out the week. If I hit the DAL stop, I'll liquidate. No new positions this week as a matter of risk management. DAL and NFLX should hedge each other enough (though, wish I were further from the DAL strike, and nearer the NFLX strike).

    I'll probably be out this afternoon and pick up the pieces on Thursday or Friday to kick off next week.
  28. Out of NFLX at $2.00. Watching DAL closely. All but certain to close this one this afternoon.

    66% loss on NFLX
  29. Out of DAL at .33 for 7%
  30. Account is liquid, so it's time to dissect the week.

    I got an unfortunate early test of my new risk management strategy for systemic risk factors--and guess what, it's a winner. While I'm down modestly this week, commissions actually exceed losses. I have a hard time calling this week a loser because of that and the knowledge gained is certainly worth the commission lost.

    The hedges did exactly as planned, disciplined use of stops and cautious reentry into market saved me from worse fate. I gained market exposure at the cost of only commissions and lost on this one. Stops cut both ways (I wish I was still in MO and MU, but avoided a worse losses on NFLX, MSFT, and AAPL), so I'll silence my inner Captain Hindsight knowing I did better with the stops than without. I'll sit this out for a day or two and let the dust settle before getting back in for next week's positions, but this time armed with the knowledge that I can weather an adverse move in the market and take it in stride.

    A 2% hit to the S&P would have pushed losses up, and I've given consideration to OTM debit spreads on the SPX to hedge this. The only problem I see here is that while I'm practiced in judging my weekly market sentiment, this play needs to be done over the course of 4-8 weeks to be cost effective, and a pivot in the market (like today) renders the remaining time relatively useless. I've calculated 4-5% of account value to protect against this move for 4 weeks which would cover 70% of losses assuming a 2% move across the board, and 85% from about a 2.4% move. This does not, however, address moves of more than 0.5% but less than 1.5%, so I'll continue for the time being hedging with individual positions rather than a S&P based one. I've also considered using a debit spread as well since it would give more protection against a large move while costing more for a small one.

    I'll leaning towards a more neutral stance for next week (my positions were mildly bullish this week). I'll watch for the next day or two, and perhaps make a slow entry into the market that I can tip either way with additional positions, with a careful eye towards systemic risks.
  31. This was an investment move, but taking advantage of the price move and volatility. Short Oct 92.50 put, long 95 call on TAP for 1.25.

    Will take assignment or exercise accordingly come expiry.
  32. APPL put spread 150-152.50 opened for .82 credit
    DAL call spread 48-49 opened for .39 credit

    5/26 for both
  33. Stopped out of DAL (earlier) for .50 - 23% loss.
    Opened V put spread over 91.50 - 92.50 for .36 credit
  34. And IBM call spread 152.50 - 150 - .60 credit
    MO put spread 70 - 71.50 - .54 credit (actually did this one by mistake...meant to do 69.50 - 71...but oh well, this is good too).
  35. And last for the day... BABA call spread 127 - 129 for .52 credit
  36. Put ADSK on your radar.
  37. They're on my backup list...along worth ADBE and AMZN. The problem is, my radar is tech heavy already. All three are short listed, but need to demote some off.... ORCL, CSCO, EBAY, and HPQ are all getting my eye for the switch.

    Also, I just realized how tech heavy I was this week...with two bears, no less! o_O
  38. I spent the entire day researching the best way to short the Naz via the cheapest puts.
  39. What time frame? I'm bullish myself for the time being (I don't follow the Nasdaq much though...S&P is my thing)...admittedly not so much to not hedge...lol
  40. Sold IBM at .92

    ...and realizing I missed my selling point on BABA Friday afternoon...and kicking myself for it.
  41. Out of V at .16 for 27% gain. IBM was a 19% loss
  42. QCOM call spread over 59 - 60 open for 0.29 credit.

    Edit: At the moment, just waiting for exits on the AAPL, MO, and BABA positions...not because I don't like the positions, just because I made a half-week's profit for a weekend's rest and I see a lot of opportunities today! :D
  43. Nice, out of MO at .30. 21% gain
  44. Out of BABA for .312 for a 11% gain.
    and APPL for .4425 for a 20% gain
  45. FDX put spread 187.5 - 190 for a .58 credit
    and NFLX put spread 152.50 - 155 for a .64 credit
    and MSFT put spread 37.50 - 38.50 for .37 credit
  46. Where you at on DAL this week BB?
  47. Just opened up a DAL put spread 47.5 - 48.5 for .32

    Lol...we're on the same wave-length (and glad I bailed on the bear here last week!)
  48. Damn....I just realized I have 4 bulls and only 1 bear.

    ...here's hopin' Trump doesn't fuck me on this one!
  49. So what beer(s)?

    Bells two hearted is always my go-to. Other times visit new breweries in the area.
  50. I live in Denver, so in the world's epicenter of beer...my go-tos are local IPAs, but always on the look out for something new and different. Ft Collins Brewery (FCB) Rocky Mountain IPA is my favorite. Also an honorable mention for Rogue Dead Guy out of Portland
  51. Sweet. We have a trip planned this summer. I want to finally buy some heady topper by alchemist in Vermont. I'm not sure I've had Rocky Mountain I'm in PA.
  52. They don't distribute outside of the Front Range...so unless you had it here or someone brought it back special. In fact, the first Denver bar with it on tap was only about 2 years ago.

    Also, a fan of Yeunling for my beach beer ;) (wish they'd had the good sense to stay out of the fray this election season though...)
  53. Yuengling is one of the best cheapest lagers I've ever had. Definitely beach day or after mowing lawn.

    And maybe they should have stayed quiet. I can't believe their profits are so large. America really likes yuengling. I wonder if they took a fiscal hit yet with that endorsement.
  54. So QCOM blew past my stop this morning while I was in the shower...still above the stop, but looking a lot nicer chart-wise. I'll go ahead and hang on here and tighten the stop above the current price...
  55. And out of QCOM at .56. And precariously bullish at the moment.
  56. Testing a new way to hedge. Long $11 put on F for .07.

    A 0.5% (systemic) move should break even on this position. a 1% move should cover losses on 1 position. a 2% move (with stops working as expected) should cover the losses of 3 positions...looking for another credit call spread to complete the hedges (surprisingly few today!!!)
  57. Opened BIDU 192.50 - 195 call spread - .80 credit
  58. Out of FDX for .18. That 19% profit (also, QCOM was a 42% loss)
  59. Out of MSFT for .18 on the chart pattern. 25% gain.
  60. Out of NFLX for .25. 18% gain.
  61. Out of DAL for .04, and looking to liquidate outstanding BIDU and F positions to close out a good week.
  62. Out of BIDU at .82
    And sold F put for .11! (Executed on the ask!!!)

    Edit: Actually kinda excited here, I've thought I saw executions at the ask on a sale before, but always chalked it up to market noise. This is the first time I've watched it happen with no movement in the spread.
  63. We're you "selling to open" that put or selling to close?
    And which strike/date was it exactly?
  64. If that was the June $10.50 and you were selling to close...
    You can bet the farm F is going down in the next week or so.
    Its $10.80 as I type.
  65. It was $11 5/26 put. I'm somewhat less impressed with my decision making now....dumped .10 in the 15 mins after my sale. GM lawsuit for emissions cheating. Couldn't have foreseen that. Oh well.

    Anyway, I am up 13% on the week, after a brief misadventure into a bearish DAL position, the rest of my portfolio did exactly as expected for the week. A modest loss on my BIDU hedge (4%), a tiny gain on my F long put (36%, but a 1/4 size position). Flipped to bullish on DAL to good effect for a 36% gain (just pennies shy of maximum possible). And this puts me about 8% plus on the month which coincides with the start of this thread.

    Now to find greener pastures for the last week of the month.
  66. Positions for next week with expiry 6/2:

    CAT call spread 105-107 for 0.65 credit.
    UNP put spread 107-108 for 0.37 credit.
    MU call spread 29.50-30.50 for .35 credit.

    ...and CAT is moving, so I'll go ahead and post this for posterity, but more edits coming for a few more positions.

    Edit: MS put spread 41.50 - 43 for .54 credit
    AIG call spread 63-64 for .35 credit
    NKE put spread 51.50 - 52.50 for .35 credit
  67. I know you closed your DAL bear... I think your bear call was right, you were just early.
    I like the 6/2 $52 puts right now for $2.44.
    A little patience and you might be able to get em at $2.35 today.
  68. Well, you're better on price calls than me, but in a market saturated at the top of the Bollinger Bands, this is one of the few that still looks like a nice bullish climber to me. (I really do hate systemic moves--I'm sure I'll have a lynch mob of VIX lovers behind me for that one, but ugh...that complicates entries).
  69. The chart certainly looks strong. But I think the Buffet effect is getting long in the tooth.
    Strong resistance at $50ish
    Its a risky play. If it breaks north it will happen fast.
  70. So...I did it again and entered an order backwards on CAT...accidentally had a debit spread. Just sold that for a .79 credit. That's a nice 9% gain. And a nice little consolation after my last such mistake with MSFT.

  71. ...and back onto the correct side of CAT for .80 credit. Hooray for profitable mistakes!
  72. ....sigh...I really need to be more careful on my order entry. Yesterday I was so hungover I literally had to close one eye to enter orders--not a single mistake and had my best day of the month (there were some day trades that didn't make it on this thread). Didn't have a drop to drink yesterday because it was so bad. Today, I'm feeling great, but I made 4 such errors (FOUR!!!!!), so it's a wash with CAT gains against the lost commissions (and my broker LOVES me).

    I'm sure there's a lesson in this, but I'm not quite sure what it is.
  73. I retract the DAL call (wash) upon more T/A. It sure looks like its ready to pop. Too risky to short right now. Not yet.
  74. Someone just bought 50 6/2 $49.50 calls for $.79
  75. I'm hopin' for ya. I don't like either side of the trade right now...precisely because it looks ready for a move.
  76. There's a $1.05:thumbsup:
    Its strong.
  77. Nice play. UNP is doing the same thing...might end up closing that one today. o_O
  78. That DAL volume graph!!! :rolleyes:

    Edit: Oh, maybe not. Looks like we might have a top at 50.25
  79. What was your play on UNP?
    Did you buy the 108 and sell the 107....
    or vice versa?
  80. Sold 108 put, bought 107.

    Always credit spreads, so, calls are bearish, puts are bullish. ;)

    ...except when I enter a debit spread by mistake.
  81. Gotcha, so you're up .13
    That'll work.
  82. UNP spread spirited away at .23 for 18%gain
  83. Yup, closed -.14
  84. Just snagged a 6/2 TTM $36 put for .30
  85. Hey you're aware they have an ER on 5/30 right?
    Just a heads up.
  86. I overlooked that...but plenty happy with with the risk even with it. The %IV didn't lead me to believe there was anything newsworthy. Ideally, I'll buy and exercise tomorrow anyway and moot the point.
  87. Stopped out of MS at .69
  88. Left NKE at .17 for a 23% gain...don't care for that doji sitting at SMA20.

    Yesterday was f-ing awful. AIG and MU blew past stops on Friday and yesterday respectively. So I stayed in them with nothing to lose. Both are showing beautiful bearish chart patterns at the moment--so we'll wait these out. CAT has looked good from day 1 and also showing that bearish chart pattern. So we'll wait these out. And actually the market wasn't what made yesterday suck--I found a mistake at work (not even mine) that's going to hit my bonus to the tune of $10k...so, obviously really unhappy about that. But today was a nice vindication of holding firm yesterday in the market.

    Who's ready for a drop tomorrow?
  89. ...and that's why I don't trade SPX or SPY.

    This week was gruesome. There's no other way to say it. I'll spare the details of the closing trades on MU, CAT, and AIG. I'll just say, going forward, I'm hedging exclusively with long puts--this would have been a good week but for my hedges going wrong in the worst possible way (gapped past my stops on AIG and MU early, and missed the CAT stop today while I was on my bike).

    I did have a reasonably good week day trading (mostly SNAP), and that picked up about half the losses from the options mess--so still plus for the year, but flat on options strategy.
  90. So of course, I end up hedging with SPXW this week...

    I tweaked my trading strategy a bit to address those devilish 0.5 - 1.0% moves that kill me (in both directions). Now, I have a bullish portfolio with hedges that cover about 75% if there's a downward move of 1%, vs. a 40% hit to max profit if everything moved up 1%. That said, if we're flat and my tend calls are accurate, I can still hit 100% of max profit if debit spread hedge moves favorably to offset the SPXW. This weeks positions (all put spreads and 6/9 expiry--except FITB):

    BABA 120-122 for .42 credit
    FITB 23-24 for .29 credit
    NFLX 160-162.50 for .53 credit
    PM 120-121 for .29 credit
    MSFT 71-72.50 for .41 debit (hedge)
    SPXW 2420-2430 for 2.15 debit (hedge)

    That should provide systemic protection without the upwards systemic risks that killed me last week--though at a fairly substantial cost (somewhere in the neighborhood of 19-26% of probable profit margin). The hedge positions represent approximately 35% of other position sizes.

    You might also note a slight preference for international exposure this week before Comey testifies to congress. ;)
  91. And picked up the call spread 122-123 to make this an iron condor. 0.40 credit
  92. 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.
  93. 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.
  94. 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.
  95. ...and pulled out .75 from my SPX spread. Quite pleased with this week (TAP loss notwithstanding).
  96. 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.
  97. 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)
  98. IBM 155-152.50 put spread .74 debit (hedge)
    BA 187.50-190 put spread .74 credit
  99. 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.
  100. MO 74-75 put spread for .37 credit
  101. And UNP 108-109 for .30 credit...filled out the positions this week...but not with any ease.
  102. Might look at that for the FOMC on Wednesday, but I really don't understand the VIX futures well enough to be trading that...
  103. Holy shit, I'm actually up on the day. These claw marks will never come out of the desk, but I held onto AAPL even as it blew past my stop (never hit my hard-stop that is based on the option price, just the underlying's stop--but volatility increase made it an almost zero-sums game between $143.50 and $144.80), but I just couldn't pass up that signal. Got this bucking bronco tamed (I think) and it's smooth sailing.

    Other than the FAANG dragging (compare XLK the Tech Spdr and RYT equal weight Tech), we had a pretty bullish day. FAANG held support strongly across the board (with the exception of AAPL, they all tested 5/18 lows today before heading higher). Long-legged dojis across the board signaling inflection. I'm ready to bolt at the slighted scent of bear shit, but I'll sleep easy tonight.
  104. There's 50%, they hit .64 a minute ago. I won't pat myself on the back here though....as my call on TSLA was dead assed wrong. I just "knew" it was taking out $356 this week.
  105. Nice call....I'm not doing so well on AAPL at the moment. Not looking so bullish on tech today.

    Edit: er...I guess it's just AAPL. The rest of the FAANG are looking good.
  106. Ugh...so frustrating. Have a close order for the UNP spread at .08, and the net ask has ticked down to .08 and held for minutes without getting a fill!!!! (Fortunately, I was able to cancel the order when I sent it as market and the spread shot up to .10...)
  107. Ugh...exact same thing again, filled at .11 after the net ask sat at .08 for at least 20 seconds after I sent in a market order...awaiting a call back from the broker now.
  108. Well, lesson learned. Different prices on different exchanges... .11 was the close on UNP but still for a generous 22% return.
  109. Out of MO at .10 for 26% gain
    ...and AAPL for .33 for flat. *sigh* not happy about that one...showed such potential.
  110. Out of IBM for .95 credit for a 9% gain.
    Out of BA at .15 for a 39% gain (...that doesn't seem right...double checking my spreadsheet)

    So, out for this week for a 12% profit assuming no recovery on SPX...I'll let that one ride through the FOMC since it doesn't have much left in value to give up and a massive potential upside if we get a nasty surprise from Yellen.
  111. And back to cash as I dump my SPX position for .45 for about 85% loss...but not bad considering it's a hedge I hoped this would expire worthless. Bumped the week's profits to to 13% and change.
  112. With all my positions closed and only two days left, my "week" of trading is over. I was close enough on my broad market call this week, because much with horse shoes and hand grenades, in options trades close counts. Followers of this thread have probably figured out that price movement isn't my cup of tea either up or down, so I wasn't thrilled with this week after the tech correction and impending FOMC. In that respect I'm quite pleased to have turned 13% in two days (that's also good because 8% is my threshold for a good vs. bad week being the strategy's statistical target).

    I wasn't thrilled about dumping IBM, and I still like that position from a price movement point; but it also carried with it the ability to turn a good week into a crummy one if held solo. So a good risk management trade, if a bad speculative trade. (As I typed this, IBM dumped .60, and no longer looks like a good position going forward, but a great closing opportunity for 1.53--would have been 100%)

    Tomorrow, I'll get an early start on next "week", which means I'll be looking for premiums 25% higher than usual since I'll have 7 trading days. That means more time to hit early exits, more opportunities to present a second round of opening orders, less absolute risk, and more contracts--all of which spell more profit opportunity. So, I'll be looking for a statistical target of 11% next week (my good vs. bad pivot point), and hopefully toeing 40% maximum profit on core positions. Still bullish for the time being, but that's not in stone.

    And one final thought--the exits on AAPL, BA, MO, and UNP all actually are looking really good in hindsight (two of those have changed since I started typing this post).
  113. ...so we all juggle with machetes, but you ever set them down and realize that they were on fire when you pull off your blindfold? That's about how I feel at the moment. Really pleased with my exits now--I can even overlook the second guessing on the hedges.
  114. Well I sat yesterday out...and while I didn't have a clear direction on the market, the real reason was the crippling hangover. Still equally unclear on market direction (still defaulting to leaning bullish).

    This week, I'm going to try something a bit different, I'm going to go against my sentiment to test how the strategy works--in theory it favors a stagnant market, but should be a winner for anything but a modest move (0.5% or more) in the opposite direction, at least on a systemic level. Overlaying individual securities trends should tip this slightly more in my favor. But I digress--I'll be a wrong-way driver this week, and we'll test it out all the same.

    Now just need the SPX (or SPY) to move to a level that meets my price and profit potential targets to open up the hedge first...

    MSFT 70-71.50 call spread opened for .43 debit
  115. SPX 2440-2450 call spread for 2.7 debit
  116. BABA 136-137 call spread for .33 credit
    NFLX 155-157.50 call spread for .68 credit
    BA 197.50-200 call spread for .88 credit
  117. ...and Finally V 34.50-35.50 for .36 credit
  118. Out of BABA for a .61 debit
  119. Out of BA for 1.38, out of SPX for 6.20.
  120. Exited NFLX for 1.06.
    And MSFT for .74
    And flat after selling V at .44

    Lots to say about today when I get to a keyboard.
  121. Today the market obliged in testing my strategy by gapping up across the board. Mercifully this was on a Monday before the options had given up all their time premium, but I did learn what I set out to do, and for a bit less than I was expecting (in fact the commissions are only a few pennies off from the losses this week).

    Percentages were:
    BA 34% loss
    BABA 47% loss
    NFLX 24% loss
    V 18% loss
    SPX 122% gain
    MSFT 63% gain (This would have been better if I hadn't been hurrying to work)

    All told, I'm down less than 5% this week--had I been quicker about closing the MSFT position with BABA and BA closings, this actually would have been a winner.

    This is the .5% - 1% gap that presents the subjective risk to my positions that I was concerned about, and that I so regularly complain about here (and yet today I'm cheering its arrival!). The larger gaps take time premium out of the equation and leave me closing hedges, and hoping on the core positions for a 30% loss on the week. These are the moves that require subjective closing of positions to manage risk. So I learned a very important lesson pertaining to this strategy this week, namely, how I personally will handle closing the positions.

    And since this happened so fast, I can effectively get another "week" of trading in...this time in line with my sentiment.
    SPX put spread open 2430-2440 for 1.90 debit.
  122. PM 120-121 put spread for .33 credit.
    BIDU 172.50-175 put spread for .62 credit
  123. MU 30-31 put spread for .30 credit
    V 93-94 put spread for .29 credit
    IBM 152.50-155 pus spread for .52 debit
  124. NFLX 152.50-155 put spread for 1.37 debit
    NVDA 150-152.50 put spread for .65 credit
  125. Oops, a little mistake I needed to correct today. I fixed my NFLX spread to what I intended to a 150-152.50 put spread for .89. Got out of the original mistake for literally $0.01 gain (on the entire position, not per share).
  126. Out of NVDA on the chart pattern at .48 for a 6% gain. bleh.
  127. Opened AAPL 144-145 put spread for .34 credit....right before that .30 drop in the underlying.
  128. Out of IBM and MU. Have a limit order on BIDU close. I'll get prices and percentages when at work.

    Edit: turns out I'm out of BIDU and only partially out of MU...*sigh* such is mobile trading.
  129. BIDU closed at .24 debit for a gain of 17%
    MU closed at .14 debit for a gain of 18%
    IBM, which was a hedge closed at 1.00 for a gain of 84%

    Still open with core positions V, PM, and AAPL, and hedges on SPX (very profitable looking), and NFLX (less so)
  130. Out of PM for .43 debit for a 19% loss
    Out of V for .36 debit for a 14% loss
    Out of SPX hedge for 4.3 credit for a 120% gain

    I'll be looking for an advantageous exit to AAPL today. I may or may not close NFLX hedge depending on how much value is left in it.
  131. Out of NFLX for .50 for a 72% loss (that's nowhere near as bad as it sounds because it's about 1/6 the size of a normal position).
    Just waiting and watching AAPL right now to close out the week.
  132. Out of AAPL at .31 for a 1% gain, and flat for the week.

    Overall this week, up 12%; and up 46% since the beginning of June when I changed my hedge positions to net long.

    An interesting week this week. First the against the market test I did between Friday and Monday (mercifully letting me out early) that I've spoken of previously. Since opening positions on Monday, the S&P moved against me (but with my SPX hedge), while my core positions held flat. So about 7/8 of profit this week came from the hedges.

    I originally started this options strategy to remove subjectivity from any decisions to close a position. But the subjective decisions has made the last three weeks very profitable. We have yet to see how this week would shake out without my intevention, but I'm not about to complain about 12% (or, if you include my test, 8% since last Friday). As it stands, I'm confident to take this strategy live with account values that would actually hurt for a loss, in that I'm prepared to take the chances of the 30-40% draw down that's likely if it hits the fan, in exchange for scaling up these winners 10-fold or more. That said, I lack the actual cash on hand to put into this (likely until October).

    As I've outlined some time ago (like first couple pages of the thread), stepping up the at-risk money will be slow process capped off at the lesser of prior week's gains or 8% per week. The point of this is to manage risk across time, because a 30% draw down on a compounded account on the week after a 36% gain is effectively a 41% loss against starting value, or a 5% total loss since inception. The 8% is my (somewhat subjective) projection for what this strategy should average. This won't totally mitigate the risks of compounding, but it will help dramatically.

    So pleased with this month so far.
  133. And open for next week (all 6/30 Expiry, all put spreads):
    CMG 415-417.50 for .96 credit
    EA 111-112 for .29 credit
    GPS 21.50-22 for .20 credit
    NVDA 155-157.50 for .88 credit
    PM 119-120 for .34 credit
    WYNN 134-135 for .28 credit

    SPX 2420-2430 for 2.20 debit
    TGT 49-50.50 for .44 debit

    And looking for one more hedge (specifically to offset NVDA and EA).
  134. And ADBE 141-143 for a .58 debit
  135. Damn it. Just realized I overlooked the GPS dividend next Friday...no wonder that position looked so good.

    I didn't see much in the way of signals today, and had to dig deep into my second string list to find enough positions (only NVDA, PM, and TGT are on my normal radar).
  136. Out of NVDA at 1.25, 26% loss
  137. I flattened out ADBE and EA as well--I got out of balance from a risk management standpoint:

    ADBE out at .34 for a 48% loss.
    EA out at .41 for a 21% loss.

    And gone are the profits from Wednesday.
  138. Risk Management :D

  139. I'm honestly getting a little jittery. I like my winning weeks to be broken up by small losses. I feel the world is out of balance when I get it right three weeks in a row and retribution will be swift and merciless.
  140. Every day is a new beginning. Completely lobotomize the last three weeks. You only have whats in front of you. Trade like its your first day ever. ;)
  141. Ugh...out of CMG on the chart pattern...rough week. $1.22 debit. 20% loss.

    GPS isn't far behind if it doesn't recover in the next 2 hours.
  142. Out of PM for .70 for 60% loss....FML!
    And SPX for 1.70 for an 8% loss.

    Really rough week this week. Can't recover from these losses in this week.

    The worst part about PM is I don't even believe it will be ITM by the end of the week...
  143. Out of GPS for .07 for a 34% gain (about damn time!)
  144. out of WYNN at .64 debit. 54% loss. :banghead:
  145. TGT is also looking like a total loss. So time to dissect the week again.

    Rule breaking abounded this week, and I was punished for it. About 27% in losses this week. I'll go through this chronologically, and pretty much duplicate the thought process as I realized what went wrong and how.

    I'll start here:
    I was playing off my radar this week because I didn't see much. My rules are pretty clear on sitting the week out when I don't see signals.

    Additionally, I put on additional positions with the winnings from previous weeks, but with the same sentiment bias that I had over the rest of my portfolio. These should be sector neutral positions, with a sector hedge. In this case, I was bullish on EA and NVDA, and used ADBE as a hedge. But this wasn't the cause of losses that I originally had believed as I closed those three positions. In reality, had I stuck to my rule (but still broken the first one), I'd have a put debit spread on NVDA, call debit spread on ADBE, and possibly a long condor over EA or something else techy. That would actually have been a bigger loser.

    So back to my first rule, not opening positions when I don't see the signals. By the time the tech positions were closed, I had noticed an almost perfect 1-to-1 move between TGT and GPS. Totally unsurprising in hindsight because I saw the exact same signal and interpreted it differently. Not necessarily a problem since TGT was a hedge (and it's losses were less than GPS gains).

    But this underscored something I've know for a long time. I'm missing the forest through the trees. My signal reading wasn't bad this week, and the fact my favorite horses in the stable weren't up for the race this week should have been all I needed to know. But no, I felt the need to stay exposed to the market. In spite of the fact I was looking for the SPX to ping off 2450 this week (when opened, it was mid 2430s, and bounced around the 2440s through the bulk of my positions being open), but didn't see signals on my go-to stocks should have tipped me off.

    We'll call this week the opposite to my 6/9 expiry week (tech correction). That week, I was bullish on tech, exited early across the board but held a hedge speculatively on a chart patter. I saw the bear in real time on each individual stock, and didn't put together this was sector systemic. I had been given warnings by people whose opinions I find reputable about the impending tech correction, but nevertheless missed it entirely. I made it out in time, and to great profit, and realized after the fact how clear and pervasive the signals were. My chickens came home to roost this week. I saw all the signals in my stocks, had a reasonable spectrum of opinions I read here that supported what I saw in individual stocks, and just didn't make the connection.

    This has been a problem of mine for some time. I've commented before that I don't see the same signals in indexes or ETFs that I do for individual stocks. That's because I rely heavily on volume and what creates my 'signal', is the presumption that other market participants are reacting to the same data I see, so I'm 2 degrees separated from the spot market (my observation of the market's reaction to the spot market activity). Why this falls apart painfully in aggregated instruments should be pretty obvious. But since I also need a market-wide sentiment to inform my position formation, I tend to be purely reactive to this. Much like Denver weather, for the S&P I have two forecasts: It's going to be like last week, or it's going to be warm and sunny--and there you have why I'm a perma-bull.

    Where I need to get better is seeing similar wishy-washy patterns (or outright bearish patterns) across a sector and connecting it to the sector. I see this often in consumer defensive because I watch those sectors closely as an investor and what they can inform on market health. I miss it a lot in other sectors. I might look to sort my list by sector rather than alphabetically. I think as I click through charts, seeing the same sector in sequence may help this. I may also put time aside specifically each week to inspect each sector until I am confident in sector direction AND see enough positions to fill my portfolio for the week...I'll keep working at this.

    In conclusion, I broke rule number 1, which is only entering trades on good signals and only when those signals are coming fast enough to fill a 5-8 position portfolio. I wasn't even close this week and because of that ended up in sectors I don't care to play (brick and mortar real estate based / retail--CMG, TGT, GPS, CMG, and WYNN--none in my stable). For my go-to stocks, I still didn't see good entries, so I was clutching at straws to open crappy positions on NVDA and EA (EA isn't in my normal stable), and took a hedge I didn't really care for either (ADBE--also not in stable).

    And underscoring this all is that my winner this week was GPS, which I was cursing within minutes of opening having overlooked a dividend (this was a secondary effect being out of my stable).

    So I was right on the market (rare enough in its own right), right in passing up the sickly horsies in my stable, and wrong only in trying to make bad signals work. All lessons I've learned before, all I hope not to have to learn again.

    As for next month, I hate short weeks anyway as I have yet to have a profitable one so I'm out for next week, and that's followed by another short week for me as I begin a vacation, followed by another week of beach and beer. Unfortunately that takes me through the July monthlies. So I'll try a few experimental positions over this period (check out the vacations spreads thread)...mostly long 'file-and-forget' type positions. I may or may not post my positions--probably not in real time if I do. At the moment I'm looking at 8/18 expiries with good liquidity--considering the calendar spreads and butterflies mostly, but also a few small long put / call positions too...we'll see how that goes.

    Edit: damn...that's a long post. I feel like I should have learned more than old lessons if I have that much to say about a week.
  146. Back from Vacation today, so time to pick this one back up (sorta).

    Vacation was a rousing success, both in my relaxation, and in my account. A monkey with a buy button could have made money the last two weeks, and I was that monkey! (there was also a really good bearish position on CMG which was actually my number 1).

    So that puts me back to my superstition that two good weeks cannot precede a third good week. As silly as this sounds from a rational standpoint, I think it affects me psychologically because it's been true of every instance during the last 3 years since I started taking notice (which was obviously based on me seeing that pattern preceding those 3 years).

    Also, this is another good place to pause because it's another earnings week, and at least 3 good setups have earnings this week.

    I am looking at a few experimental positions (for example a Calendar spread suggested by @tommcginnis ), just to see how they work. Specifically SPX 2450 puts with 7/26 short and 7/28 long for 1.15 debit. I expect this one to lose money, but any increase in volatility should send this one north. See the Vacation Spreads thread I started here: https://www.elitetrader.com/et/threads/vacation-spreads.310769/
    That also shows the rationale for why I did so well while gone with long put options.

    Beyond that, I'm bullish through early October (no coincidentally just before next earnings season) after we past 2450 as I described in the linked thread above. So, I'll probably be transitioning to Diagonal spreads with 8/20 expiry for the longs.

    And finally, I have a cash crunch with some tenants moving out of a property, and that might send me quiet while I make ends meet with my trading account balance in the short term.
  147. Thank you Google!
  148. Some new positions today. Closed the SPX option for a loss--being experimental in nature, it was a large percentage but small dollars.

    Currently opened positions are:
    PM diagonal. Short 8/4 $118, long 9/15 $120 for .80 debit.
    VIX call ratio spread. Short 1x 9/16 $9 call; long 2x $10 call for .45 debit

    Currently legging into a MSFT diagon--the long is already open for 10/20 $75 call.
  149. Someone bought 10,000 NVIDIA Mar 16 $130 Calls at the ask yesterday.
    A $46 Million dollar bet.
  150. So 2 days later this purchase is up 5 Million.
    Must be nice.
  151. Our boy's calls are worth $60 MM today. Nothing like making 30% on $45,000,000 in a week.
    Was that you Surf?
  152. Worth $65 Million one month later.
  153. Is there a way to tell if this was a stand alone trade ? And not part of a hedge, etc .
  154. Yeah there's been a lot of discussion about following large option trades here.
    I don't think there's a way to really tell what the buyer was trying to accomplish, however this purchase was at the "ask" ... and as I recall it was all done in one trade pretty much.
    Must have been a lucky Nigerian Prince.
    I knew I should have answered that email.
  155. You can see the trades from CME, I think--but it's usually pretty obvious from a 1, 2, or 5 min chart if it was a single trade from the volume, and if it's on the bid or ask.
  156. Although, could be hedging a short in the common ? Or a short in another tech name ?
  157. Could be either. If you can answer that, you'd be filthy rich. When I see big moves in the options volume I'll look around the market and see what I can find (it's not uncommon to see a likely linked move in the underlying or another symbol). I'm also conscious of what someone else could infer about my volume on less liquid instruments...being that on more liquid ones I'm just a drop in the bucket. But something like TTM, I've had positions open for weeks where I had consecutive transactions for the open and close on it.