On 5/29/08, with the bullish trend and break up through resistance at 80 on JOYG, I bought a bull call (debit) spread VERTICAL JOYG JUN 08 75/85 CALL @ $5.05 debit.
Today with some resistance showing I got out for a profit, SOLD VERTICAL JOYG JUN 08 75/85 CALL @ $7.50 credit.
7.50-5.05/5.05= 48.5% ROI in 1 day! WOW!
Friday, May 30, 2008
Thursday, May 29, 2008
OPEN: NMX Jun 90/95 Dbl Put Calendar
Seeing the channel between 90 and 100, we put on a double calendar on NMX today.
BOT CALENDAR NMX JUL 08/JUN 08 95 PUT @ $1.50 debit
BOT CALENDAR NMX JUL 08/JUN 08 90 PUT @ $1.55 debit
Total cost basis= $3.05
If this begins to trend upward above 95, I will look to add on a calendar at 100.
BOT CALENDAR NMX JUL 08/JUN 08 95 PUT @ $1.50 debit
BOT CALENDAR NMX JUL 08/JUN 08 90 PUT @ $1.55 debit
Total cost basis= $3.05
If this begins to trend upward above 95, I will look to add on a calendar at 100.
OPEN: BEN Jun 95 & 100 Dbl Put Calendar
BOT CALENDAR BEN 100 JUL 08/JUN 08 95 PUT @1.68 debit
BOT CALENDAR BEN 100 JUL 08/JUN 08 100 PUT @1.75 debit
Total cost basis= $3.43
CLOSE: SHLD Post Earnings Butterfly +53.9%
Earnings came out last night so G$ and I did anothe white hoof (post earnings butterfly) on paper.
BOT BUTTERFLY SHLD JUN 08 85/90/95 CALL @ $0.76 debit
SOLD BUTTERFLY SHLD JUN 08 85/90/95 CALL @ $1.17 credit
1.17-.76/.76= 53.9% ROI in 1 day!
BOT BUTTERFLY SHLD JUN 08 85/90/95 CALL @ $0.76 debit
SOLD BUTTERFLY SHLD JUN 08 85/90/95 CALL @ $1.17 credit
1.17-.76/.76= 53.9% ROI in 1 day!
CLOSE: AAPL Naked Put Jun 170 +8.3%
On 5/8/08 Naked Put: SOLD AAPL JUN 08 170 PUT @ $4.00 credit
My margin risk was $22.61.
Today, my exit order triggered early because of the same issue with RIMM. I did a cancel/replace to correct the decimal error-but then it triggered. At least it got me out for a profit! I learned my lesson though that it is crucial to double check your waiting orders very carefully. One decimal place can make a HUGE difference!
BOT AAPL JUN 08 170 PUT @ $2.11 debit
4.00-2.11/22.61= 8.3% in 21 days
My margin risk was $22.61.
Today, my exit order triggered early because of the same issue with RIMM. I did a cancel/replace to correct the decimal error-but then it triggered. At least it got me out for a profit! I learned my lesson though that it is crucial to double check your waiting orders very carefully. One decimal place can make a HUGE difference!
BOT AAPL JUN 08 170 PUT @ $2.11 debit
4.00-2.11/22.61= 8.3% in 21 days
CLOSE: RIMM Naked Put Jun 130 +8.8%
On 5/15/08 I entered the trade as follows:
Opened this naked put on RIMM at Jun 130 puts for a credit of $3.87 this morning.
$20.86 margin risk
I set my stop loss for twice the credit at $7.74 per contract.
Today my exit order was off by one decimal so I did a cancel/replace order to correct it to be at $ 0.77. Unfortunately, it triggered early somehow, but I still exited for a profit.
BOT RIMM 100 JUN 08 130 PUT @ $2.04 debit
3.87-2.04/20.86= 8.8% in 14 days
Opened this naked put on RIMM at Jun 130 puts for a credit of $3.87 this morning.
$20.86 margin risk
I set my stop loss for twice the credit at $7.74 per contract.
Today my exit order was off by one decimal so I did a cancel/replace order to correct it to be at $ 0.77. Unfortunately, it triggered early somehow, but I still exited for a profit.
BOT RIMM 100 JUN 08 130 PUT @ $2.04 debit
3.87-2.04/20.86= 8.8% in 14 days
CLOSE: DBC Naked Put Jun 38 +10.2%
On 5/15/08 I opened: SOLD JUN 38 PUT @ $0.85 credit
Set stop loss for twice my credit= $1.70
My risk was the $6.08 margin.
Today my exit order was triggered as follows:
BOT DBC JUN 08 38 PUT @ $0.23 debit
0.85-0.23/6.08= 10.2% in 14 days
Set stop loss for twice my credit= $1.70
My risk was the $6.08 margin.
Today my exit order was triggered as follows:
BOT DBC JUN 08 38 PUT @ $0.23 debit
0.85-0.23/6.08= 10.2% in 14 days
ADJUST: V Double Calendar
On 5/22/08 I entered the Jun/Jul 75 & 85 put calendars with a cost basis of $2.50.
Here's where I was today before I adjusted. Notice how the stock is currently toward the lower right side of the slope almost toward the upper breakeven of $86.78. Also notice how my delta is -819.16 which means for every dollar the stock goes up, I will lose $819.16! OUCH!
Today I am removing my 75 and adding the 85 as this stock has been uptrending. Also, I am further mitigating risk by lowering my delta exposure.
SOLD CALENDAR V JUL 08/JUN 08 75 PUT @ $0.95 credit
BOT CALENDAR V JUL 08/JUN 08 85 PUT @ $1.45 debit
This changes my delta risk to -357.85 and shifts my upper breakeven even higher to $91.14.
New cost basis= 2.50 +1.45 - 0.95= $3.00
Here's where I was today before I adjusted. Notice how the stock is currently toward the lower right side of the slope almost toward the upper breakeven of $86.78. Also notice how my delta is -819.16 which means for every dollar the stock goes up, I will lose $819.16! OUCH!
Today I am removing my 75 and adding the 85 as this stock has been uptrending. Also, I am further mitigating risk by lowering my delta exposure.
SOLD CALENDAR V JUL 08/JUN 08 75 PUT @ $0.95 credit
BOT CALENDAR V JUL 08/JUN 08 85 PUT @ $1.45 debit
This changes my delta risk to -357.85 and shifts my upper breakeven even higher to $91.14.
New cost basis= 2.50 +1.45 - 0.95= $3.00
CLOSE: AMED Long Call +24.5%
On 5/29, I have exited this trade as it has not had much activity in 20 days.
On 5/9/08 Bought long position to open: BOT AMED 100 JUN 08 50 CALL @4.35
On 5/15/08 Sold short leg to adjust: SOLD AMED 100 JUN 08 55 CALL @.80
Cost basis= 4.35-0.80= $3.55
On 5/21/08 Bought back short leg: BOT AMED 100 JUN 08 55 CALL @1.35
On 5/29/08 Sold long position to close: SOLD AMED 100 JUN 08 50 CALL @2.22
-1.35+2.22= $0.87 profit/3.55 cost basis= +24.5% ROI in 20 days
On 5/9/08 Bought long position to open: BOT AMED 100 JUN 08 50 CALL @4.35
On 5/15/08 Sold short leg to adjust: SOLD AMED 100 JUN 08 55 CALL @.80
Cost basis= 4.35-0.80= $3.55
On 5/21/08 Bought back short leg: BOT AMED 100 JUN 08 55 CALL @1.35
On 5/29/08 Sold long position to close: SOLD AMED 100 JUN 08 50 CALL @2.22
-1.35+2.22= $0.87 profit/3.55 cost basis= +24.5% ROI in 20 days
CLOSE: POT Naked Put Jun 170 +22.4%
On 5/8/08 I sold the Naked Put: Jun 170 put for credit of $4.80. My risk was the margin held at $17.00.
Today my exit order (at 80% of my credit) was triggered at:
BOT POT JUN 08 170 PUT @ $0.98 debit
4.80-.98/17.00= 22.4% ROI in 21 days
Today my exit order (at 80% of my credit) was triggered at:
BOT POT JUN 08 170 PUT @ $0.98 debit
4.80-.98/17.00= 22.4% ROI in 21 days
CLOSE: LFC Bull Put Spread -8.5%
On 5/8/08 I entered the LFC Bull Put Spread:
Jun 57.5/55 puts for credit of $0.62 credit
This trade is no longer bullish as it has broken down through support and the 30 & 50 day moving averages, so it is now going against me. I thought of adjusting the position, but according to my trading rules, if the trend goes against me in verticals-I get out. The loss is small and I sized this position in the first place for max loss, so I will cut my losses and run.
Today I exited at:
BOT JUN 57.5/55 PUT @ $0.78 debit
0.62-0.78/(2.50-0.62)= -8.5% loss in 21 days
Jun 57.5/55 puts for credit of $0.62 credit
This trade is no longer bullish as it has broken down through support and the 30 & 50 day moving averages, so it is now going against me. I thought of adjusting the position, but according to my trading rules, if the trend goes against me in verticals-I get out. The loss is small and I sized this position in the first place for max loss, so I will cut my losses and run.
Today I exited at:
BOT JUN 57.5/55 PUT @ $0.78 debit
0.62-0.78/(2.50-0.62)= -8.5% loss in 21 days
Wednesday, May 28, 2008
CLOSE: IBM Long Call +63.2%
On 5/8/08 I entered the trade as follows:
IBM Long Call
Jun 125 Call for debit of $3.40
No stop loss but sized for maximum loss
Today after 2 solid bullish candle days, I am getting out and taking my winnings and running with them before this retraces.
SOLD IBM JUN 08 125 CALL @ $5.55 credit
5.55-3.40/3.40= 63.2% in 20 days
IBM Long Call
Jun 125 Call for debit of $3.40
No stop loss but sized for maximum loss
Today after 2 solid bullish candle days, I am getting out and taking my winnings and running with them before this retraces.
SOLD IBM JUN 08 125 CALL @ $5.55 credit
5.55-3.40/3.40= 63.2% in 20 days
Friday, May 23, 2008
OPEN: USO Jun 99/98 BLPS
USO has shown a little restest today & yesterday but is maintaining it's steady bullish trend.
I started looking at a BLPS Jun 100/99 for a credit of $0.35 as I was seeing a lot of consolidation along 100 as support. I'm now looking at the Jun 99/98 for credit of $0.25 instead. You get $1.00 more protection and only give up $0.10 on the credit.
I ended up getting a better credit than expected because it dropped slightly this morning.
SOLD VERTICAL USO JUN 08 99/98 PUT @ $0.30 credit
0.30/Risk of 1.00-.30=42.8% ROI potential
I started looking at a BLPS Jun 100/99 for a credit of $0.35 as I was seeing a lot of consolidation along 100 as support. I'm now looking at the Jun 99/98 for credit of $0.25 instead. You get $1.00 more protection and only give up $0.10 on the credit.
I ended up getting a better credit than expected because it dropped slightly this morning.
SOLD VERTICAL USO JUN 08 99/98 PUT @ $0.30 credit
0.30/Risk of 1.00-.30=42.8% ROI potential
Thursday, May 22, 2008
CLOSE: USO Long Call +121.7%
On 5/9/08 I entered the trade:
BOT USO JUN 08 95 CALL @8.30 debit
On 5/15/08 I adjusted the trade by adding a short call as follows:
SOLD USO JUN 08 105 CALL @2.30 credit
Cost Basis: 8.30-2.30= $6.00 (most $ at risk)
On 5/21/08 I bought back the short call as USO has broken resistance at 150:
BOT USO JUN 08 105 CALL @5.35 debit
Today, I have sold the long call to exit the trade as it is showing slight resistance below 110:
SOLD USO JUN 08 95 CALL @12.65 credit
Profit: -5.35 + 12.65= $7.30 profit
7.30 profit/6.00 risk= 121.7% in 13 days
BOT USO JUN 08 95 CALL @8.30 debit
On 5/15/08 I adjusted the trade by adding a short call as follows:
SOLD USO JUN 08 105 CALL @2.30 credit
Cost Basis: 8.30-2.30= $6.00 (most $ at risk)
On 5/21/08 I bought back the short call as USO has broken resistance at 150:
BOT USO JUN 08 105 CALL @5.35 debit
Today, I have sold the long call to exit the trade as it is showing slight resistance below 110:
SOLD USO JUN 08 95 CALL @12.65 credit
Profit: -5.35 + 12.65= $7.30 profit
7.30 profit/6.00 risk= 121.7% in 13 days
ADJUST: BCS Dbl. Calendar
I also rolled my Sep down to July on this calendar I had for protection and to further reduce my cost basis.
SOLD CALENDAR BCS SEP 08/JUL 08 30 CALL @.60 credit
SOLD CALENDAR BCS SEP 08/JUL 08 35 CALL @.59 credit
My cost basis as of 5/15/08 when I entered the trade was $2.05, so now it is adjusted to:
2.05-.60-.50= $0.95
SOLD CALENDAR BCS SEP 08/JUL 08 30 CALL @.60 credit
SOLD CALENDAR BCS SEP 08/JUL 08 35 CALL @.59 credit
My cost basis as of 5/15/08 when I entered the trade was $2.05, so now it is adjusted to:
2.05-.60-.50= $0.95
ADJUST: XLE Call Calendar
On 5/9/08 I entered the trade as follows:
BOT CALENDAR XLE SEP 08/JUN 08 85 CALL @ $2.85 debit
Today I decided to tighten my long leg by rolling the September down to July. There is too much volatility in the market now to have long legs that far out in time. As most of my calendars took a hit today, I am tightening them up for protection.
Today:
SOLD CALENDAR XLE SEP 08/JUL 08 85 CALL @ $2.15 credit
This brings my cost basis down to 2.85-2.15= $0.70!
BOT CALENDAR XLE SEP 08/JUN 08 85 CALL @ $2.85 debit
Today I decided to tighten my long leg by rolling the September down to July. There is too much volatility in the market now to have long legs that far out in time. As most of my calendars took a hit today, I am tightening them up for protection.
Today:
SOLD CALENDAR XLE SEP 08/JUL 08 85 CALL @ $2.15 credit
This brings my cost basis down to 2.85-2.15= $0.70!
OPEN: POT, UNG, V
POT:
SOLD -12 POT 100 JUN 08 195 PUT @ $8.50 credit
Exit naked put at 80% profit at $1.70 debit.
Stop loss set to twice credit at $17.00 debit.
UNG:
Naked Put: SOLD UNG JUN 08 52 PUT @ $0.92 credit
Exit naked put at 80% profit at $0.18 debit.
Stop loss set to twice credit at $1.84 debit.
Bull Put Spread: SOLD VERTICAL UNG JUN 08 53/51 PUT @ $0.55 credit
.55/risk of 2-.55= 37.9% profit potential.
Sized for max loss-no stop set.
V:
Double Calendar:
BOT CALENDAR V JUL 08/JUN 08 75 PUT @1.30 debit
BOT CALENDAR V JUL 08/JUN 08 80 PUT @1.20 debit
Total cost basis= $2.50
SOLD -12 POT 100 JUN 08 195 PUT @ $8.50 credit
Exit naked put at 80% profit at $1.70 debit.
Stop loss set to twice credit at $17.00 debit.
UNG:
Naked Put: SOLD UNG JUN 08 52 PUT @ $0.92 credit
Exit naked put at 80% profit at $0.18 debit.
Stop loss set to twice credit at $1.84 debit.
Bull Put Spread: SOLD VERTICAL UNG JUN 08 53/51 PUT @ $0.55 credit
.55/risk of 2-.55= 37.9% profit potential.
Sized for max loss-no stop set.
V:
Double Calendar:
BOT CALENDAR V JUL 08/JUN 08 75 PUT @1.30 debit
BOT CALENDAR V JUL 08/JUN 08 80 PUT @1.20 debit
Total cost basis= $2.50
CLOSE: NTES Post Earnings Butterfly +27.7%
Here's the 4th backtested butterfly I have done ....
This one was a fighter as we had craziness from the unemployment report that came out this morning as well as the fact that we're approaching a 3 day holiday weekend. This one took longer than expected to complete, but eventually-with patience and a few adjustments in my order prices, I completed the trade.
At 11:49am I entered as follows:
BOT BUTTERFLY NTES 100 JUN 08 20/22.5/25 CALL @.83 debit
At 3:40pm, I exited as follows:
SOLD BUTTERFLY NTES 100 JUN 08 20/22.5/25 CALL @1.06 credit
1.06-.83/.83= 27.7% ROI in a few hours!
Please note this is a paper trade.....
This one was a fighter as we had craziness from the unemployment report that came out this morning as well as the fact that we're approaching a 3 day holiday weekend. This one took longer than expected to complete, but eventually-with patience and a few adjustments in my order prices, I completed the trade.
At 11:49am I entered as follows:
BOT BUTTERFLY NTES 100 JUN 08 20/22.5/25 CALL @.83 debit
At 3:40pm, I exited as follows:
SOLD BUTTERFLY NTES 100 JUN 08 20/22.5/25 CALL @1.06 credit
1.06-.83/.83= 27.7% ROI in a few hours!
Please note this is a paper trade.....
Wednesday, May 21, 2008
ADJUST: MSFT Dbl. Put Calendar
MSFT has been heading downward so I am adding a bottom calendar to give me some downward protection.
Today I added this calendar:
BOT CALENDAR MSFT OCT 08/JUN 08 27 PUT @1.10 debit
On 5/14/08 I entered the trade as below:
BOT CALENDAR MSFT OCT 08/JUN 08 30 PUT @1.09 debit
So now my adjusted cost basis= 1.10+1.09= $2.19
Now my position is delta neutral with good theta on my side for my short legs.
Today I added this calendar:
BOT CALENDAR MSFT OCT 08/JUN 08 27 PUT @1.10 debit
On 5/14/08 I entered the trade as below:
BOT CALENDAR MSFT OCT 08/JUN 08 30 PUT @1.09 debit
So now my adjusted cost basis= 1.10+1.09= $2.19
Now my position is delta neutral with good theta on my side for my short legs.
CLOSE: DVN Iron Butterfly +5.7%
On 5/8/08 I entered the trade as follows:
SOLD IRON CONDOR DVN JUN 08 115/130/120/105 CALL/PUT @11.50 credit
Today, I am done with the trade as volatility has crushed and it is starting to upturn:
BOT IRON CONDOR DVN 100 JUN 08 115/130/120/105 CALL/PUT @11.30 debit
(11.50-11.30)/(15-11.50) risk= 5.7% ROI profit in 13 days
SOLD IRON CONDOR DVN JUN 08 115/130/120/105 CALL/PUT @11.50 credit
Today, I am done with the trade as volatility has crushed and it is starting to upturn:
BOT IRON CONDOR DVN 100 JUN 08 115/130/120/105 CALL/PUT @11.30 debit
(11.50-11.30)/(15-11.50) risk= 5.7% ROI profit in 13 days
CLOSE: CCJ Post Earnings Butterfly +3.2%
This one was a monster trade. I was at around a 20% loss for a while on this one, but it never hit my stop loss near 30%.
My fellow trade buddies that did this trade got stopped out today, but luckily, I took off my stop loss last night seeing the volatility craziness. Since this position was sized correctly for max loss, I figured that I was already willing to lose the full debit I spent, so I took off the stop loss to see where it would go today.
On 5/14/08 I entered as follows:
BOT BUTTERFLY CCJ JUN 08 45/40/35 PUT @1.90 debit
Today I exited at just above breakeven for a small profit merely on a volatility fluctuation:
SOLD BUTTERFLY CCJ JUN 08 45/40/35 PUT @1.96 credit
1.96-1.90/1.90= 3.2% ROI in 7 days
My fellow trade buddies that did this trade got stopped out today, but luckily, I took off my stop loss last night seeing the volatility craziness. Since this position was sized correctly for max loss, I figured that I was already willing to lose the full debit I spent, so I took off the stop loss to see where it would go today.
On 5/14/08 I entered as follows:
BOT BUTTERFLY CCJ JUN 08 45/40/35 PUT @1.90 debit
Today I exited at just above breakeven for a small profit merely on a volatility fluctuation:
SOLD BUTTERFLY CCJ JUN 08 45/40/35 PUT @1.96 credit
1.96-1.90/1.90= 3.2% ROI in 7 days
CLOSE: SOLF Post Earnings Butterfly +37.1%
Here's another backtested butterfly....this stock announced earnings last night at 8pm. The open interest on the Jun 30 calls was over 13,000, so this made a good candidate for a "Hoof."
Today at 11:04am, I opened this trade as follows:
BOT BUTTERFLY SOLF JUN 08 25/30/35 CALL @ $0.89 debit
I immediately placed an exit order and got filled 24 minutes later at 11:35am as follows:
SOLD BUTTERFLY SOLF JUN 08 25/30/35 CALL @ $1.22 credit
1.22-0.89/0.89= 37.1% in 24 minutes!
Today at 11:04am, I opened this trade as follows:
BOT BUTTERFLY SOLF JUN 08 25/30/35 CALL @ $0.89 debit
I immediately placed an exit order and got filled 24 minutes later at 11:35am as follows:
SOLD BUTTERFLY SOLF JUN 08 25/30/35 CALL @ $1.22 credit
1.22-0.89/0.89= 37.1% in 24 minutes!
Tuesday, May 20, 2008
CLOSE: CSUN Post Earnings Butterfly +29.6%
Here's another post earnings butterfly (white hoof) from GMoney that I traded within 30 minutes today.
CSUN also had earnings yesterday with a gap down first thing this morning from yesterday's close. Then it headed back upward to try to fill the gap all day.
When I first looked at the trade around 3pm, the debit was around 0.70, so I placed my order at 0.55 to see if it would fill. After about 4 minutes, the volatility fluctuated so I got in as seen below:
At 3:04pm, BOT BUTTERFLY CSUN JUN 08 15/12.5/10 PUT @.54 debit
Then I immediately put my exit order in for 0.70 as this was the highest price I had seen it go all day. It took a while to fill as the volatility moved the price around a bit between 0.725 and 0.60.
At 3:35pm, SOLD BUTTERFLY CSUN JUN 08 15/12.5/10 PUT @.70 credit
.70-.54/.54= 29.6% ROI in 30 minutes! WOW!
Although I capped my gains by getting out quickly, the great thing is that I was able to capture a great profit in a very short time.
This strategy is being backtested now and is being done through paper trading with TOS. Please be advised that if you are trading this real money, you may not get the same fills as me and when I do. ALso, remember to size these for max loss (i.e. you're willing to lose all that you spent on the trade), instead of setting a stop loss. This way you don't get stopped out for no reason in the middle of the volatility craziness. Good luck!
CLOSE: PBR Post Earnings Butterfly -36.2%
On 5/13 I entered the trade as follows:
Bought Jun 70 put
Sold Jun 65 put
Bought Jun 60 put
Net debit of $0.94
Today, I couldn't take any more pain from this "hoof." I put in a stop order at 30% and got stopped out in the afternoon.
SOLD -195 BUTTERFLY PBR 100 JUN 08 70/65/60 PUT @.65 credit
.65-.94/.94= -36.2% loss
I have thus changed my strategy a bit with GMoney on these post earnings butterflies. See my close posts for CSUN & AZO today.
Bought Jun 70 put
Sold Jun 65 put
Bought Jun 60 put
Net debit of $0.94
Today, I couldn't take any more pain from this "hoof." I put in a stop order at 30% and got stopped out in the afternoon.
SOLD -195 BUTTERFLY PBR 100 JUN 08 70/65/60 PUT @.65 credit
.65-.94/.94= -36.2% loss
I have thus changed my strategy a bit with GMoney on these post earnings butterflies. See my close posts for CSUN & AZO today.
CLOSE: AZO Post Earnings Butterfly +30.1%
Today GMoney posted a butterfly ('white hoof") so I decided to get in after the 1st hour.
This stock has been heading upward since April so we did the calls instead of puts.
Earnings occurred last night at 8:30pm so allowing this to open this morning to see where it would end up post earnings helps shave your risk down dramatically.
When I looked at this trade at 12:42pm, this butterfly was worth about 0.95, so i placed an order to fill at 0.75 so I could capture more of the volatility craziness today. The greeks still looked good where my theta was worth twice my delta, giving me great protection on my shorts.
BOT BUTTERFLY AZO JUN 08 125/130/135 CALL @.73 debit
Then I put an exit order to fill at 0.95. I got filled at 1:07pm at 0.95.
SOLD BUTTERFLY AZO JUN 08 125/130/135 CALL @.95 credit
.95-.73/.73= 30.1% in less than 1 hour!
You may still be able to capture the volatility if you play with your order price...be patient and watch it. Good luck!
This stock has been heading upward since April so we did the calls instead of puts.
Earnings occurred last night at 8:30pm so allowing this to open this morning to see where it would end up post earnings helps shave your risk down dramatically.
When I looked at this trade at 12:42pm, this butterfly was worth about 0.95, so i placed an order to fill at 0.75 so I could capture more of the volatility craziness today. The greeks still looked good where my theta was worth twice my delta, giving me great protection on my shorts.
BOT BUTTERFLY AZO JUN 08 125/130/135 CALL @.73 debit
Then I put an exit order to fill at 0.95. I got filled at 1:07pm at 0.95.
SOLD BUTTERFLY AZO JUN 08 125/130/135 CALL @.95 credit
.95-.73/.73= 30.1% in less than 1 hour!
You may still be able to capture the volatility if you play with your order price...be patient and watch it. Good luck!
Friday, May 16, 2008
CLOSE: DE Butterfly +17.1%
On 5/14/08 I opened the trade as follows:
Bought DE JUN 08 75/85/95 CALL @ $3.63 debit
Today after the volatility crush, I exited as follows:
SOLD -55 BUTTERFLY DE 100 JUN 08 75/85/95 CALL @ $4.25 credit
4.25-3.63/3.63= .62/3.63= 17.1% in 2 days!
Bought DE JUN 08 75/85/95 CALL @ $3.63 debit
Today after the volatility crush, I exited as follows:
SOLD -55 BUTTERFLY DE 100 JUN 08 75/85/95 CALL @ $4.25 credit
4.25-3.63/3.63= .62/3.63= 17.1% in 2 days!
Thursday, May 15, 2008
ADJUST: USO Long Call
Like AMED today, I also added a short leg at Jun 150 calls on USO for some protection.
I got in for a debit of $2.30.
I got in for a debit of $2.30.
OPEN: UPL Jun 80 Naked Put
Here's another naked put from our meeting...
SOLD JUN 80 PUT @ $2.80 credit
Risk= $10.26 margin held
Set my stop loss for twice the credit at $5.60.
Also set my exit order GTC for $0.55 (80% of my credit).
SOLD JUN 80 PUT @ $2.80 credit
Risk= $10.26 margin held
Set my stop loss for twice the credit at $5.60.
Also set my exit order GTC for $0.55 (80% of my credit).
OPEN: DBC Jun 38 Naked Put
One of our trade group members brought up this stock. DBC has had a steady uptrend since September 2007. It has currently reached it's all-time high at 40 with a little consolidation over the last few days. When we looked it last night the credit was worth about $0.65.
However Mojo from insanemoney.com suggested we place a fill order at $0.80 or 0.85 to see if it fills as this may retrace slightly to test the moving averages as it continues to make it's way upward. As he predicted, that's what happened later on this morning, so I got filled as below....
SOLD JUN 38 PUT @ $0.85 credit
Set stop loss for twice my credit= $1.70
My risk is $6.08 margin held. I will exit at 80% of value of credit (around $0.17 debit to exit)
However Mojo from insanemoney.com suggested we place a fill order at $0.80 or 0.85 to see if it fills as this may retrace slightly to test the moving averages as it continues to make it's way upward. As he predicted, that's what happened later on this morning, so I got filled as below....
SOLD JUN 38 PUT @ $0.85 credit
Set stop loss for twice my credit= $1.70
My risk is $6.08 margin held. I will exit at 80% of value of credit (around $0.17 debit to exit)
OPEN: BCS Jun/Sep 30/35 Dbl Call Calendar
BOT SEP 08/JUN 08 35 CALL @ $1.10 debit
BOT SEP 08/JUN 08 30 CALL @ $0.95 debit
Total cost basis= $2.05
B/E range is between 28.57 - 36.61. Check out the risk graph below.....by adding the 2nd calendar I am stretching out my breakeven range and spreading out my profit potential (notice the shallow curve on the chart).
I did a double calendar since the stock is currently around $33.00 (between 2 strikes available of 30 & 35).
If the stock tests 32.50 line, which is where it is near now (current support level), and moves back upward, then I may remove my 30 calendar. I will analyze at that point.
BOT SEP 08/JUN 08 30 CALL @ $0.95 debit
Total cost basis= $2.05
B/E range is between 28.57 - 36.61. Check out the risk graph below.....by adding the 2nd calendar I am stretching out my breakeven range and spreading out my profit potential (notice the shallow curve on the chart).
I did a double calendar since the stock is currently around $33.00 (between 2 strikes available of 30 & 35).
If the stock tests 32.50 line, which is where it is near now (current support level), and moves back upward, then I may remove my 30 calendar. I will analyze at that point.
OPEN: RIMM Jun 130 Naked Put
Opened this naked put on RIMM at Jun 130 puts for a credit of $3.87 this morning.
387 credit /2251 margin risk= 17.2% profit potential
I set my stop loss for twice the credit at $7.74 per contract.
387 credit /2251 margin risk= 17.2% profit potential
I set my stop loss for twice the credit at $7.74 per contract.
ADJUST: AMED Long Call
For the last couple of days, AMED has been neutral (consolidation) and hitting a resistance near 52.50.
I analyzed the trade in TOS and noticed that my greeks on this trade had gotten worse as the trade was now going against me. I am not ready to exit this trade yet until it breaks down through support at 50, so I have sold Jun 55 calls to lower my delta, theta and vega risk.
I got a credit of $0.80 so that lowers my cost basis to 4.35-0.80= $3.55.
Here's how it changed my greeks:
With just the long calls I had (9 contracts), I had:
Delta= 510.27
Theta= -27.35
Vega= 57.69
Once I added the short leg I had:
Delta= 285.85
Theta= -5.32
Vega= 11.14
So I almost lowered my delta risk by half and lowered my theta risk by 5 times! Remember, if you are long, you have time and volatility working against you!
As long as AMED stays above 50, I will remain in the trade and if it starts uptrending again above 52.50 then I will remove my short leg and keep the long call.
I analyzed the trade in TOS and noticed that my greeks on this trade had gotten worse as the trade was now going against me. I am not ready to exit this trade yet until it breaks down through support at 50, so I have sold Jun 55 calls to lower my delta, theta and vega risk.
I got a credit of $0.80 so that lowers my cost basis to 4.35-0.80= $3.55.
Here's how it changed my greeks:
With just the long calls I had (9 contracts), I had:
Delta= 510.27
Theta= -27.35
Vega= 57.69
Once I added the short leg I had:
Delta= 285.85
Theta= -5.32
Vega= 11.14
So I almost lowered my delta risk by half and lowered my theta risk by 5 times! Remember, if you are long, you have time and volatility working against you!
As long as AMED stays above 50, I will remain in the trade and if it starts uptrending again above 52.50 then I will remove my short leg and keep the long call.
Wednesday, May 14, 2008
OPEN: DE & CCJ Butterflies
Earnings came out yesterday for both DE & CCJ, so we are doing some more "White Hooves" or post-earnings volatility crush plays.
Bought CCJ JUN 08 45/40/35 PUT @ $1.90 debit
Bought DE JUN 08 75/85/95 CALL @ $3.63 debit
Bought CCJ JUN 08 45/40/35 PUT @ $1.90 debit
Bought DE JUN 08 75/85/95 CALL @ $3.63 debit
Tuesday, May 13, 2008
OPEN: PBR Butterfly
This is another post earnings butterfly or "White Hoof Special" as my trading group likes to call it, courtesy of G-Money.
Earnings came out on 5/12/08 and the stock has started it's bullish move with a gap up from yesterday's close this morning and volatility is higher than it has been for PBR over the past year at least. In this type of trade, you expect volatility to start to drop (when stocks move up or after the news comes out like with earnings, because typically volatility drops because there is less fear among investors). So I am buying this butterfly today as follows...
Bought Jun 70 put
Sold Jun 65 put
Bought Jun 60 put
Net debit of $0.94
Exit upon volatility crush within 7-10 days post earnings.
Earnings came out on 5/12/08 and the stock has started it's bullish move with a gap up from yesterday's close this morning and volatility is higher than it has been for PBR over the past year at least. In this type of trade, you expect volatility to start to drop (when stocks move up or after the news comes out like with earnings, because typically volatility drops because there is less fear among investors). So I am buying this butterfly today as follows...
Bought Jun 70 put
Sold Jun 65 put
Bought Jun 60 put
Net debit of $0.94
Exit upon volatility crush within 7-10 days post earnings.
CLOSE: WMT Triple Calendar +10.2%
On 5/6/08 I opened the trade & ended up getting filled as follows:
May/Jun 50 puts for $0.19 debit
May/Jun 55 puts for $0.61 debit
May/Jun 60 calls for $0.38 debit
Total cost basis= $1.18
Now the big mistake I made on this trade was missing my exit yesterday afternoon before earnings today. Due to work, I had my exit order placed but it did not get filled in time before market close, so had it gotten filled my profit would have been double of what it was today.
Today, I exited and got lucky by the market gods! This morning my profit was down to +$425 but by the last 5 minutes of the market hours, I exited with a profit of $2,040!
SOLD JUN 08/MAY 08 50 PUT @ $0.10 credit
SOLD JUN 08/MAY 08 60/55/60/55 CALL/PUT/CALL/PUT @ $1.20 credit
Total exit credit= $1.30
(1.30-1.18)/1.18= +10.2%
WHEW is all I have to say! The next time I do this, I need to be on top of my exit order until it gets filled BEFORE EARNINGS!
May/Jun 50 puts for $0.19 debit
May/Jun 55 puts for $0.61 debit
May/Jun 60 calls for $0.38 debit
Total cost basis= $1.18
Now the big mistake I made on this trade was missing my exit yesterday afternoon before earnings today. Due to work, I had my exit order placed but it did not get filled in time before market close, so had it gotten filled my profit would have been double of what it was today.
Today, I exited and got lucky by the market gods! This morning my profit was down to +$425 but by the last 5 minutes of the market hours, I exited with a profit of $2,040!
SOLD JUN 08/MAY 08 50 PUT @ $0.10 credit
SOLD JUN 08/MAY 08 60/55/60/55 CALL/PUT/CALL/PUT @ $1.20 credit
Total exit credit= $1.30
(1.30-1.18)/1.18= +10.2%
WHEW is all I have to say! The next time I do this, I need to be on top of my exit order until it gets filled BEFORE EARNINGS!
Friday, May 9, 2008
OPEN: USO, AMED, XLE
Here are some more entries I did today along with my trading group:
USO Long Call
Jun 95 call for debit of $8.30
No stop loss set, but sized for maximum loss
AMED Long Call
Pop on bullish flag today with strong volume
Jun 50 Call for debit of $4.35
No stop loss set, but sized for maximum loss
XLE Calendar
Uptrend, low volatility-good time to enter calendars
Jun/Sep 85 calls for debit of $2.85
USO Long Call
Jun 95 call for debit of $8.30
No stop loss set, but sized for maximum loss
AMED Long Call
Pop on bullish flag today with strong volume
Jun 50 Call for debit of $4.35
No stop loss set, but sized for maximum loss
XLE Calendar
Uptrend, low volatility-good time to enter calendars
Jun/Sep 85 calls for debit of $2.85
Thursday, May 8, 2008
OPEN: DVN, POT, AAPL, GS, IBM, LFC
Today I placed several trades with my trade group:
DVN Iron Butterfly (post earnings)
Jun 115 call
Jun 130 call
Jun 120 put
Total credit= $11.50
Exit on volatility crush
POT Naked Put
Jun 170 put for credit of $4.80
AAPL Naked Put
Jun 170 put for credit of $4.00
GS Naked Put
Jun 175 put for credit of $5.00
IBM Long Call
Jun 125 Call for debit of $3.40
No stop loss but sized for maximum loss
LFC Bull Put Spread
Jun 57.5/55 puts for credit of $0.62
DVN Iron Butterfly (post earnings)
Jun 115 call
Jun 130 call
Jun 120 put
Total credit= $11.50
Exit on volatility crush
POT Naked Put
Jun 170 put for credit of $4.80
AAPL Naked Put
Jun 170 put for credit of $4.00
GS Naked Put
Jun 175 put for credit of $5.00
IBM Long Call
Jun 125 Call for debit of $3.40
No stop loss but sized for maximum loss
LFC Bull Put Spread
Jun 57.5/55 puts for credit of $0.62
CLOSE: USO Long Jun 94 Call -20.8%
Yesterday, I opened this long call: Bought MAY 94 CALL @ $6.25 debit
Today, I got stopped out as it faced a resistance near 100.
Sold MAY 08 94 CALL @ $4.95 debit
(4.95-6.25)/6.25= 20.8% loss
What went wrong with the trade is I accidentally set my stop at 20% instead of at 50%. Had I done 50% I would still be in it now. 20% is WAY too tight.
So my new rule for trading long positions is to not place a stop at all, but size the trade for max loss upon entry (only risking for the whole trade what I am willing to lose on my portfolio). Luckily I sized this trade at 2% of my total account, but only lost 20% of that 2%= 0.4% of portfolio. Not too bad...
So overall, this was a good learning experience.
Today, I got stopped out as it faced a resistance near 100.
Sold MAY 08 94 CALL @ $4.95 debit
(4.95-6.25)/6.25= 20.8% loss
What went wrong with the trade is I accidentally set my stop at 20% instead of at 50%. Had I done 50% I would still be in it now. 20% is WAY too tight.
So my new rule for trading long positions is to not place a stop at all, but size the trade for max loss upon entry (only risking for the whole trade what I am willing to lose on my portfolio). Luckily I sized this trade at 2% of my total account, but only lost 20% of that 2%= 0.4% of portfolio. Not too bad...
So overall, this was a good learning experience.
Wednesday, May 7, 2008
OPEN: DIA Shotgun (Triple) Calendar May/Jun Q 125, 128, 131
Per insanemoney.com, they put on a shotgun calendar on DIA on 4/23/08. I missed a shot at getting in back then as I was recovering from my trip.
Today, with DIA near 128, I decided to pull the trigger and open the trade.
I bought the May/Jun Quarterly 125, 128 & 131 calendars. Here is the analyze chart from TOS...I have almost neutralized this trade by adding the 125 calendar, eventhough insanemoney took that leg off this morning. I felt that I could add it on for protection since it has been down since this morning.
Also my theta increased by several points which means my short positions in each calendar will make more money for me. Also, vega increased as well which means that I will make more money as volatility increases. Since this is a debit trade, I want volatility to increase so i can exit the trade for a higher credit (at a higher volatility, the price is worth more).
Here were my fill prices:
BOT (Quarterlys) JUN5 08/MAY 08 125 PUT @1.73 debit
BOT (Quarterlys) JUN5 08/MAY 08 128 PUT @1.98 debit
BOT (Quarterlys) JUN5 08/MAY 08 131 CALL @1.73 debit
Total original cost basis= $5.44
Then, once I got into the trade, I rolled all my Mays to Jun to bring down my cost basis significantly and because I'm within my 10 day window before expiration to roll my legs for maximum pricing (remember once you get closer to expry, your volatility goes crazy).
SOLD JUN 08/BOUGHT MAY 08 125 PUT @ $1.50 credit
SOLD JUN 08/BOUGHT MAY 08 128 PUT @ $1.69 credit
SOLD JUN 08/BOUGHT MAY 08 131 CALL @ $1.38 credit
Total credit on roll= $4.57
New cost basis= $5.44-$4.57= $0.87
So essentially my next roll from Jun to the Jun Quarterlies will give me pure profit since my cost basis is now below $1.00!
Today, with DIA near 128, I decided to pull the trigger and open the trade.
I bought the May/Jun Quarterly 125, 128 & 131 calendars. Here is the analyze chart from TOS...I have almost neutralized this trade by adding the 125 calendar, eventhough insanemoney took that leg off this morning. I felt that I could add it on for protection since it has been down since this morning.
Also my theta increased by several points which means my short positions in each calendar will make more money for me. Also, vega increased as well which means that I will make more money as volatility increases. Since this is a debit trade, I want volatility to increase so i can exit the trade for a higher credit (at a higher volatility, the price is worth more).
Here were my fill prices:
BOT (Quarterlys) JUN5 08/MAY 08 125 PUT @1.73 debit
BOT (Quarterlys) JUN5 08/MAY 08 128 PUT @1.98 debit
BOT (Quarterlys) JUN5 08/MAY 08 131 CALL @1.73 debit
Total original cost basis= $5.44
Then, once I got into the trade, I rolled all my Mays to Jun to bring down my cost basis significantly and because I'm within my 10 day window before expiration to roll my legs for maximum pricing (remember once you get closer to expry, your volatility goes crazy).
SOLD JUN 08/BOUGHT MAY 08 125 PUT @ $1.50 credit
SOLD JUN 08/BOUGHT MAY 08 128 PUT @ $1.69 credit
SOLD JUN 08/BOUGHT MAY 08 131 CALL @ $1.38 credit
Total credit on roll= $4.57
New cost basis= $5.44-$4.57= $0.87
So essentially my next roll from Jun to the Jun Quarterlies will give me pure profit since my cost basis is now below $1.00!
OPEN: USO Long May 94 Call
So I am testing out doing some long positions on trending stocks during this market.
On USO, I saw a nice volume spike today with a 3rd day confirmation above support at 95. So I bought some calls at 94.
Bought MAY 94 CALL @ $6.25 debit
I bought the May because I have 9 days to expiration and I not looking to hold this for probably more than a few days since this is a speculative trade.
I placed a stop loss near $5.00 as a 20% stop.
On USO, I saw a nice volume spike today with a 3rd day confirmation above support at 95. So I bought some calls at 94.
Bought MAY 94 CALL @ $6.25 debit
I bought the May because I have 9 days to expiration and I not looking to hold this for probably more than a few days since this is a speculative trade.
I placed a stop loss near $5.00 as a 20% stop.
Tuesday, May 6, 2008
CLOSE: POT Long Jun 190 Call +7.6%
I opened this trade this morning at $19.50 and closed out the call at $21.00 to generate some quick cash in my account.
$1.50/19.50= 7.6% in 1 day
$1.50/19.50= 7.6% in 1 day
OPEN: POT Long Call Jun 190
Got this trade from insanemoney.com.
POT had a nice bounce off the 30 and 50 day moving averages near 175 a few days ago. Yesterday it opened just above 190 which filled the previous gaps on 4/16 and 4/29.
Bought JUN 08 190 CALL @ $19.50 debit
Expecting to either cash this trade out or roll this long call into a possible spread....will update you soon.
POT had a nice bounce off the 30 and 50 day moving averages near 175 a few days ago. Yesterday it opened just above 190 which filled the previous gaps on 4/16 and 4/29.
Bought JUN 08 190 CALL @ $19.50 debit
Expecting to either cash this trade out or roll this long call into a possible spread....will update you soon.
OPEN: WMT Triple Calendar May/Jun 50 put,55 put,60 call
Got part of this trade from someone in my trade group:
In looking at the double calendar that Karl put on (May/Jun 55 puts & 60 calls), I got the following greeks:
Delta 6.76
Theta 3.35
Vega 7.85
Now I added a third calendar (May/Jun 50 put) for a little downside protection and to make the trade delta neutral with maximum theta and vega...This is what i got:
Delta 1.22
Theta 3.95
Vega 10.51
Now I am still grasping the use of greeks with all trades, so in my mind, the triple calendar would be more delta neutral with theta around 3 times more than the delta, and even higher vega, since I want volat. to increase. All this for only and extra $0.23.
I ended up getting filled as follows:
May/Jun 50 puts for $0.19 debit
May/Jun 55 puts for $0.61 debit
May/Jun 60 calls for $0.38 debit
Total cost basis= $1.18
BTW, I too would be getting out before earnings so I have 7 days so my plan is to get out once volatility is high 1 or 2 days before earnings.
In looking at the double calendar that Karl put on (May/Jun 55 puts & 60 calls), I got the following greeks:
Delta 6.76
Theta 3.35
Vega 7.85
Now I added a third calendar (May/Jun 50 put) for a little downside protection and to make the trade delta neutral with maximum theta and vega...This is what i got:
Delta 1.22
Theta 3.95
Vega 10.51
Now I am still grasping the use of greeks with all trades, so in my mind, the triple calendar would be more delta neutral with theta around 3 times more than the delta, and even higher vega, since I want volat. to increase. All this for only and extra $0.23.
I ended up getting filled as follows:
May/Jun 50 puts for $0.19 debit
May/Jun 55 puts for $0.61 debit
May/Jun 60 calls for $0.38 debit
Total cost basis= $1.18
BTW, I too would be getting out before earnings so I have 7 days so my plan is to get out once volatility is high 1 or 2 days before earnings.
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