My total credit upon entry was $2.49. I am closing out this trade today as I start to downsize my portfolio for my upcoming 2 week trip.
BOT APR 08 110/115/85/80 CALL/PUT @1.90 debit
2.49-1.90= 0.59 / 5.00 risk = +11.8% in 11 days!
Monday, March 31, 2008
CLOSE: USO Iron Condor -72.2%
On 3/13 I bought the (call diagonal) Apr 91 Call for $2.50 and Sold Mar 90 Call for $0.82.
Total debit of -$1.68.
On 3/19, I adjusted by buying back the Mar 90 & selling the Apr 90 call for a total credit of $1.35 now making this a vertical spread.
-1.68+1.35= -$0.33 cost basis
On 3/20, I converted the vertical to an iron condor by:
Sold BRCS Apr 87/90 call for a credit of $0.62.
Sold BLPS Apr 77/73 put for a credit of $1.12.
-0.33 cost + 0.62 credit + 1.12 credit= $1.41 total credit
New Risk= 4.00 spread-1.41 credit= $2.59
On 3/27, I added on the May 70 long calls to be delta neutral again, this was for a debit of $16.75.
16.75-1.41= $15.34 cost basis
On 3/28, I closed out the long call by selling the MAY 70 CALL for $14.75 credit.
15.34-14.75 = $0.59 cost basis
Today, on 3/31, I closed out the entire trade:
Bought APR 08 87/91 CALL @0.58 debit
Bought APR 08 77/73 PUT @0.70 debit
1.87/2.59 risk= 72.2% loss
So here's an example of how an iron condor can sneak up on you and take a bite out of your "you know what!"
Total debit of -$1.68.
On 3/19, I adjusted by buying back the Mar 90 & selling the Apr 90 call for a total credit of $1.35 now making this a vertical spread.
-1.68+1.35= -$0.33 cost basis
On 3/20, I converted the vertical to an iron condor by:
Sold BRCS Apr 87/90 call for a credit of $0.62.
Sold BLPS Apr 77/73 put for a credit of $1.12.
-0.33 cost + 0.62 credit + 1.12 credit= $1.41 total credit
New Risk= 4.00 spread-1.41 credit= $2.59
On 3/27, I added on the May 70 long calls to be delta neutral again, this was for a debit of $16.75.
16.75-1.41= $15.34 cost basis
On 3/28, I closed out the long call by selling the MAY 70 CALL for $14.75 credit.
15.34-14.75 = $0.59 cost basis
Today, on 3/31, I closed out the entire trade:
Bought APR 08 87/91 CALL @0.58 debit
Bought APR 08 77/73 PUT @0.70 debit
1.87/2.59 risk= 72.2% loss
So here's an example of how an iron condor can sneak up on you and take a bite out of your "you know what!"
CLOSE: ZMH Apr/Jun BRCS 0%
On 2/8/08, Bought Jun 65 Call for $14.75 and Sold Mar 80 Call for $2.00 for a total debit of $12.75.
On 2/19, I adjusted my position by buying back the Mar 80 and selling to Mar 75 call for $1.95 credit.
On 3/6, I closed out the calendar Apr 08/Mar 08 75 Calls for a $1.15 credit.
Then I sold the Jun 65 for $13.15 & bought the Jun 75 Calls for $5.95 for a total $7.20 credit.
My cost basis then was $2.45.
Today, I am closing it all out for my trip:
SOLD MAY 08/APR 08 75 CALL @1.50 (Here I rolled my April to May to get an extra credit to lower my cost basis.
2.45-1.50= $0.95 cost basis
SOLD JUN 08/MAY 08 75 CALL @0.95 (Here I closed out the whole trade)
0/0.95 cost basis= 0% profit (breakeven)
On 2/19, I adjusted my position by buying back the Mar 80 and selling to Mar 75 call for $1.95 credit.
On 3/6, I closed out the calendar Apr 08/Mar 08 75 Calls for a $1.15 credit.
Then I sold the Jun 65 for $13.15 & bought the Jun 75 Calls for $5.95 for a total $7.20 credit.
My cost basis then was $2.45.
Today, I am closing it all out for my trip:
SOLD MAY 08/APR 08 75 CALL @1.50 (Here I rolled my April to May to get an extra credit to lower my cost basis.
2.45-1.50= $0.95 cost basis
SOLD JUN 08/MAY 08 75 CALL @0.95 (Here I closed out the whole trade)
0/0.95 cost basis= 0% profit (breakeven)
CLOSE: POT Iron Condor +25.3%
On 3/13 I opened the vertical Apr 135/130 put with a credit of $1.07.
On 3/18 I added a BRCS Apr 180/185 call for a credit of $0.85.
My total credit was $1.92.
Today I have closed the trade out as seen below:
Bought APR 08 Iron Condor 180/185/135/130 CALL/PUT for a $1.14 debit.
(1.92-1.14) profit/ (5.00-1.92) risk = 0.78/3.08= 25.3% in 2 weeks
On 3/18 I added a BRCS Apr 180/185 call for a credit of $0.85.
My total credit was $1.92.
Today I have closed the trade out as seen below:
Bought APR 08 Iron Condor 180/185/135/130 CALL/PUT for a $1.14 debit.
(1.92-1.14) profit/ (5.00-1.92) risk = 0.78/3.08= 25.3% in 2 weeks
CLOSE: LVS Dbl. Put Calendar +14.4%
On 3/18, I bought the Jun 70 for 5.75 & sold the Apr 70 for 2.62. I adjusted my cost basis to $2.70+ 3.13= $5.83.
On 3/28 I closed out my first leg (Apr/Jun 85 put) for $2.80 credit.
On 3/31 I closed out last leg (Apr/Jun 70 put) for $3.87 credit.
5.83-2.80-3.87= 0.84 profit/5.83 adj. cost basis= 14.4% profit in 2 weeks
On 3/28 I closed out my first leg (Apr/Jun 85 put) for $2.80 credit.
On 3/31 I closed out last leg (Apr/Jun 70 put) for $3.87 credit.
5.83-2.80-3.87= 0.84 profit/5.83 adj. cost basis= 14.4% profit in 2 weeks
CLOSE: TGT Dbl. Put Calendar +11.8%
On 3/13, I put on a Double Put Calendar:
Bought Jul 47.5 put for $4.10
Sold Apr 47.5 put for $1.80 for a net debit of $2.30
Bought Jul 52.5 put for $6.50
Cost basis= $4.65
On 3/24, I adjusted by closing out 1 leg (the 47.5 put calendar):
Sold JUL 08/APR 08 47.5 PUT @2.22 credit
Today I am closing out as seen below:
(Here I rolled my July position down to May to get an extra credit squeeze on the trade before closing out)
Sold JUL 08/MAY 08 52.5 PUT @1.60 credit
4.65-1.60= 3.05 adjusted cost basis
(Then later on today I closed out completely)
Sold MAY 08/APR 08 52.5 PUT @1.19 credit
Profit= 4.65- 2.22 - 1.60 - 1.19 = + 0.36 profit / 3.05 adjusted cost basis= 11.8% in 2 weeks
Bought Jul 47.5 put for $4.10
Sold Apr 47.5 put for $1.80 for a net debit of $2.30
Bought Jul 52.5 put for $6.50
Cost basis= $4.65
On 3/24, I adjusted by closing out 1 leg (the 47.5 put calendar):
Sold JUL 08/APR 08 47.5 PUT @2.22 credit
Today I am closing out as seen below:
(Here I rolled my July position down to May to get an extra credit squeeze on the trade before closing out)
Sold JUL 08/MAY 08 52.5 PUT @1.60 credit
4.65-1.60= 3.05 adjusted cost basis
(Then later on today I closed out completely)
Sold MAY 08/APR 08 52.5 PUT @1.19 credit
Profit= 4.65- 2.22 - 1.60 - 1.19 = + 0.36 profit / 3.05 adjusted cost basis= 11.8% in 2 weeks
Friday, March 28, 2008
ADJUST: USO Iron Condor w/ Protective Call
So now the stock has turned back down, so I am selling the 16 contracts back.
SOLD -16 USO 100 MAY 08 70 CALL @ $14.75 credit.
My cost basis was $18.16 so now it is 18.16- 14.75 = $ 3.41
As soon as I sold these back, I was able to shave off about 27% of my loss on my trade.
SWEET!
Now, if it goes up again, I can rebuy these calls.
SOLD -16 USO 100 MAY 08 70 CALL @ $14.75 credit.
My cost basis was $18.16 so now it is 18.16- 14.75 = $ 3.41
As soon as I sold these back, I was able to shave off about 27% of my loss on my trade.
SWEET!
Now, if it goes up again, I can rebuy these calls.
Thursday, March 27, 2008
CLOSE: EXM Short Straddle - 2.2%
My credit remaining after closing out the 30 straddle on 3/20 gave me $6.29. Now volatility is crushing so I am out completely.
BOT +13 STRADDLE EXM 100 APR 08 25 CALL/PUT @6.70
6.29-6.70= $0.41 loss
0.41/ 12.87 total credit+ 6 margin = 2.2% loss
BOT +13 STRADDLE EXM 100 APR 08 25 CALL/PUT @6.70
6.29-6.70= $0.41 loss
0.41/ 12.87 total credit+ 6 margin = 2.2% loss
ADJUST: USO Iron Condor w/ Protective Call
This trade was seriously going against me by bouncing up off the 30 day moving average near 80. I had a huge delta risk on this trade at around -$850 which means I was losing $850 a day for every $1.00 the stock moved up! OUCH!
So in using the Analyze tool on ThinkorSwim (TOS), and added 16 contracts of a long call May 70 to hedge against any further loss. This made my trade delta neutral again, increased my probabilities at this time, and gave me some more breathing room.
Bought +16 USO 100 MAY 08 70 CALL @ $16.75 debit
If this trade starts heading back down again, then I will simply sell these 16 contracts back for a credit.
My last cost basis before this trade was $1.41, so now it is 16.75 + 1.41= $18.16
So in using the Analyze tool on ThinkorSwim (TOS), and added 16 contracts of a long call May 70 to hedge against any further loss. This made my trade delta neutral again, increased my probabilities at this time, and gave me some more breathing room.
Bought +16 USO 100 MAY 08 70 CALL @ $16.75 debit
If this trade starts heading back down again, then I will simply sell these 16 contracts back for a credit.
My last cost basis before this trade was $1.41, so now it is 16.75 + 1.41= $18.16
Tuesday, March 25, 2008
CLOSE: DIA Shotgun Put Calendar +1.7%
I am closing this one out too for my trip.
On 3/20 I started this trade with the following:
Total debits (risk) = $12.18
Total credits= $8.08
Total cost basis= 1.30 + 1.42 + 1.38 = $4.10
Today I am closing the whole trade out:
SOLD -36 DIA 100 MAY 08 120 PUT @2.48
BOT +36 DIA 100 APR 08 120 PUT @-1.21
SOLD -36 DIA 100 MAY 08 122 PUT @3.05
BOT +36 DIA 100 APR 08 122 PUT @-1.65
SOLD -36 DIA 100 MAY 08 126 PUT @4.55
BOT +36 DIA 100 APR 08 126 PUT @-3.05
$4.17 Total Credit upon exit
4.17-4.10= 0.07 profit/4.10 cost basis= 1.7% in 3 days
On 3/20 I started this trade with the following:
Total debits (risk) = $12.18
Total credits= $8.08
Total cost basis= 1.30 + 1.42 + 1.38 = $4.10
Today I am closing the whole trade out:
SOLD -36 DIA 100 MAY 08 120 PUT @2.48
BOT +36 DIA 100 APR 08 120 PUT @-1.21
SOLD -36 DIA 100 MAY 08 122 PUT @3.05
BOT +36 DIA 100 APR 08 122 PUT @-1.65
SOLD -36 DIA 100 MAY 08 126 PUT @4.55
BOT +36 DIA 100 APR 08 126 PUT @-3.05
$4.17 Total Credit upon exit
4.17-4.10= 0.07 profit/4.10 cost basis= 1.7% in 3 days
Friday, March 21, 2008
Thursday, March 20, 2008
OPEN: MOS Apr Iron Condor
Upon entering this trade, I accidentally sold the wrong strikes at first, so I quickly corrected myself and adjusted accordingly.
Here's what I did:
Incorrect leg:
SOLD -35 VERTICAL MOS 100 APR 08 80/85 CALL @3.40
BOT +35 VERTICAL MOS 100 APR 08 80/85 CALL @3.45
Loss= $0.05
Correct Vertical:
SOLD -35 VERTICAL MOS 100 APR 08 110/115 CALL @.84
SOLD -35 VERTICAL MOS 100 APR 08 85/80 PUT @1.70
Total credit= 0.84+1.70-0.05= $2.49 credit
Risk= 5.00
Here's what I did:
Incorrect leg:
SOLD -35 VERTICAL MOS 100 APR 08 80/85 CALL @3.40
BOT +35 VERTICAL MOS 100 APR 08 80/85 CALL @3.45
Loss= $0.05
Correct Vertical:
SOLD -35 VERTICAL MOS 100 APR 08 110/115 CALL @.84
SOLD -35 VERTICAL MOS 100 APR 08 85/80 PUT @1.70
Total credit= 0.84+1.70-0.05= $2.49 credit
Risk= 5.00
CLOSE: AMP Short Straddle +5%
On 3/19/08 I opened this trade for a credit of $7.17.
Today, volatility has started to deflate as you can see in the chart below, so I am closing out early and taking my profits.
I exited the trade for a debit of $6.50.
7.17-6.50= 0.67 net profit
0.67/13.33 risk= 5% in 1 day!
Today, volatility has started to deflate as you can see in the chart below, so I am closing out early and taking my profits.
I exited the trade for a debit of $6.50.
7.17-6.50= 0.67 net profit
0.67/13.33 risk= 5% in 1 day!
OPEN: DIA Shotgun Put Calendar
Here's a new calendar strategy where you put on several calendars at different strikes to give you the ability to profit if the stock goes up or down along those strikes you bought. If the stock starts moving in one direction or the other, you can remove any of the outer legs and replace a put calendar at a higher or lower strike for more directional protection.
BOT MAY 08 120 for $3.08 & Sold APR 08 120 PUT for $1.78 = $1.30 total debit
BOT MAY 08 122 for $3.75 & Sold APR 08 122 PUT for $2.33 = $1.42 total debit
BOT MAY 08 126 for $5.35 & Sold APR 08 126 PUT for $3.97 = $1.38 total debit
I also put on the May/Apr 124 put but could not get it filled so that is why there's a gap between the 122 and 126 above.
Total debits (risk) = $12.18
Total credits= $8.08
Total cost basis= 1.30 + 1.42 + 1.38 = $4.10
BOT MAY 08 120 for $3.08 & Sold APR 08 120 PUT for $1.78 = $1.30 total debit
BOT MAY 08 122 for $3.75 & Sold APR 08 122 PUT for $2.33 = $1.42 total debit
BOT MAY 08 126 for $5.35 & Sold APR 08 126 PUT for $3.97 = $1.38 total debit
I also put on the May/Apr 124 put but could not get it filled so that is why there's a gap between the 122 and 126 above.
Total debits (risk) = $12.18
Total credits= $8.08
Total cost basis= 1.30 + 1.42 + 1.38 = $4.10
ADJUST: USO BRCS to Iron Condor
Ok I am readjusting this USO again for added security by turning it to an iron condor.
I traded in my Apr 90 for and Apr 87 so now I have a BRCS at Apr 87/91. I got a credit for this for $0.62.
Then I added a BLPS Apr 77/73 puts for a credit of $1.12.
If my calculations are right, I have reduced risk and increased potential yield as follows:
Original debit of time diagonal: - $1.65
Converted Mar 90 to Apr 90 for a credit of: +$1.35
Traded my Apr 90 for Apr 87 for a credit of: +$0.62
Sold a bull put spread Apr 77/73 for credit of:+$1.12
So my net credit is now $1.41
My risk is now 4.00 (diff. between spread strikes) and 1.41= $2.59
1.41/2.59= 54.4% max profit
I traded in my Apr 90 for and Apr 87 so now I have a BRCS at Apr 87/91. I got a credit for this for $0.62.
Then I added a BLPS Apr 77/73 puts for a credit of $1.12.
If my calculations are right, I have reduced risk and increased potential yield as follows:
Original debit of time diagonal: - $1.65
Converted Mar 90 to Apr 90 for a credit of: +$1.35
Traded my Apr 90 for Apr 87 for a credit of: +$0.62
Sold a bull put spread Apr 77/73 for credit of:+$1.12
So my net credit is now $1.41
My risk is now 4.00 (diff. between spread strikes) and 1.41= $2.59
1.41/2.59= 54.4% max profit
ADJUST: EXM Short Straddle 30 call/put
Today, volatility is starting to deflate and the stock has shifted lower, so I am removing my topside 30 straddle.
BOT +13 STRADDLE EXM 100 APR 08 30 CALL/PUT @6.58
Original credit on 3/17 = $12.87
12.87 - 6.58 = $6.29 credit remaining
BOT +13 STRADDLE EXM 100 APR 08 30 CALL/PUT @6.58
Original credit on 3/17 = $12.87
12.87 - 6.58 = $6.29 credit remaining
Wednesday, March 19, 2008
ADJUST: USO Time Diagonal to BRCS
I was in the Apr 91/Mar 90 time call diagonal. Today is expiration day for my March but I missed a chance to exit out of this trade completely this morning (taking my dog to the hospital)! :(
I converted my Mar 90 to Apr 90 for a credit of $1.35. My total debit upon entry of this trade was $1.68. So now my current cost basis is $0.33.
This gives me more time to profit on this trade as it continues to head down. It appears to have reached its 1 year high and is turning down today so I chose to stay in this a little longer.
I converted my Mar 90 to Apr 90 for a credit of $1.35. My total debit upon entry of this trade was $1.68. So now my current cost basis is $0.33.
This gives me more time to profit on this trade as it continues to head down. It appears to have reached its 1 year high and is turning down today so I chose to stay in this a little longer.
CLOSE: FMCN Short Straddle +18.7%
Yesterday, I opened this just before market close with a credit of $5.75.
Today, I decided to close it out to not risk anything by holding out and getting assigned since I had the March call & put and today is expiration day. Today was a nasty day in the market so I wanted to mitigate loss as much as possible in my portfolio!
I got out for a debit of $3.25.
(5.75-3.25)Net Profit/(5.75 credit + 7.58 margin)Risk =18.7% ROI in 1 day
Today, I decided to close it out to not risk anything by holding out and getting assigned since I had the March call & put and today is expiration day. Today was a nasty day in the market so I wanted to mitigate loss as much as possible in my portfolio!
I got out for a debit of $3.25.
(5.75-3.25)Net Profit/(5.75 credit + 7.58 margin)Risk =18.7% ROI in 1 day
Tuesday, March 18, 2008
OPEN: FMCN Short Straddle Mar 35
With the news today of the Fed rate 3/4 point drop as well as the volatility craziness leftover from Bear Sterns' (BSC) news, one of our fellow traders found this straddle today.
We did the March 35 short straddle bringing in a credit of $5.75.
Mojo at Insanemoney and I did the March's because we are planning to let this expire and get assigned on Monday morning unless this goes against us between tomorrow and Thursday's expiration. Normally, the brokerages give you 3-4 hours in negative cash in your account when you get assigned to come up with the money, so our goal is to turn right around and sell the stock back for a profit.
We did the March 35 short straddle bringing in a credit of $5.75.
Mojo at Insanemoney and I did the March's because we are planning to let this expire and get assigned on Monday morning unless this goes against us between tomorrow and Thursday's expiration. Normally, the brokerages give you 3-4 hours in negative cash in your account when you get assigned to come up with the money, so our goal is to turn right around and sell the stock back for a profit.
ADJUST: POT Apr 135/130 BLPS & Apr 180/185 BRCS
On 3/13 I started with a BLPS at Apr 130/135 for $1.07 credit.
Today it looks like it is retesting the resistance near 164 so since this is the 1 year high, I am hedging myself if this heads back down by adding a bear call spread.
I sold the Apr 180 and bought the 185 calls for a credit of $0.85.
So now, my yield is ($1.07 + 0.85)/($5.00-1.92)= 62.3%
Today it looks like it is retesting the resistance near 164 so since this is the 1 year high, I am hedging myself if this heads back down by adding a bear call spread.
I sold the Apr 180 and bought the 185 calls for a credit of $0.85.
So now, my yield is ($1.07 + 0.85)/($5.00-1.92)= 62.3%
ADJUST: LVS Apr/Jun 70/85 Put Calendar
On 3/13 I entered this Put Calendar at 85 for Apr/Jun for a debit of $2.70.
Today, seeing that this has bounced off of 70 and started heading up again, caused me to hedge my position by adding a second calendar at 70 for an additional debit of $3.13.
This is how it increased my probability:
Here's the analysis chart for just the single 85 calendar I was in. Notice how I only had a 42.85% probability that the stock would hit my strike of 85 for max profitability.
Here's the chart with the 70 and the 85 double put calendar. Now my probability of max profit has increased to 60.14% for only an additional $3.13.
I bought the Jun 70 for 5.75 & sold the Apr 70 for 2.62. So now my adjusted cost basis is $2.70+ 3.13= $5.83.
I reset my stop loss to $4.09 (30% loss)
Today, seeing that this has bounced off of 70 and started heading up again, caused me to hedge my position by adding a second calendar at 70 for an additional debit of $3.13.
This is how it increased my probability:
Here's the analysis chart for just the single 85 calendar I was in. Notice how I only had a 42.85% probability that the stock would hit my strike of 85 for max profitability.
Here's the chart with the 70 and the 85 double put calendar. Now my probability of max profit has increased to 60.14% for only an additional $3.13.
I bought the Jun 70 for 5.75 & sold the Apr 70 for 2.62. So now my adjusted cost basis is $2.70+ 3.13= $5.83.
I reset my stop loss to $4.09 (30% loss)
CLOSE: CAT Put Mar/Apr 70 Put Calendar +83%
I started this trade on 2/20 for a debit of $1.89. I last adjusted my position on 3/14 and adjusted my cost basis to $0.42. Today, seeing that this trade is going against me with a gap up on open above 75, I closed out for a credit of $0.77
My final ROI is (0.77-0.42)/ 0.42= 83.3% ROI in 1 month!
My final ROI is (0.77-0.42)/ 0.42= 83.3% ROI in 1 month!
Monday, March 17, 2008
OPEN: EXM Short Straddle
I did a double short straddle today for extra probability and protection. This is a new strategy we are testing so we will see how it goes. The double straddle gives me a wider breakeven range with higher probability.
SOLD APR 08 30 CALL/PUT @7.25
SOLD APR 08 25 CALL/PUT @5.62
7.25 + 5.62 = $12.87 credit
SOLD APR 08 30 CALL/PUT @7.25
SOLD APR 08 25 CALL/PUT @5.62
7.25 + 5.62 = $12.87 credit
Friday, March 14, 2008
ROLL: CAT Mar to Apr/May 70 Put Calendar
I rolled my Mar 70 put to Apr today since it's a week before expry. Remember, you don't want to roll in the last week of expry because market makers will such out value fromvolatility & theta decay. Granted, now looking back I should have rolled this back on 3/11 when the stock was right around 70.
I bought back the Mar & sold the Apr for a credit of $1.47. My original cost basis was $1.89 so now my adjusted cost basis is $0.42.
I bought back the Mar & sold the Apr for a credit of $1.47. My original cost basis was $1.89 so now my adjusted cost basis is $0.42.
OPEN: AMP Apr 50 Short Straddle
Mojo got this trade from his friend Matt, and since volatility is looking great on this stock for a straddle, I am placing the trade as well.
The probability of this trade is around 57% and our trading breakeven range is from 42.82-57.16.
I sold the Mar call & put for a net credit of $7.17. This is over a risk of $16.43 (credit plus margin).
The probability of this trade is around 57% and our trading breakeven range is from 42.82-57.16.
I sold the Mar call & put for a net credit of $7.17. This is over a risk of $16.43 (credit plus margin).
Thursday, March 13, 2008
OPEN: UPS Triple Call Calendar
UPS Triple Call Calendar:
Ok last one for the day....
A fellow trader brought up that UPS was in a solid channel between 65 and 75. So some of us tossed around the ideas of doing either a single call calendar at 70, a double calendar at 65 and 75, or a triple at 65, 70 & 75.
Of the 3, the analysis of the triple was the best because you get the best of both worlds. You get a breakeven spread that's still further out than the single. And you make money faster because now instead of 2 profit peaks on the analysis tab you get three. With the double, you get the 2 peaks, but a huge dip in the middle which means 0 profit initially-you'd have to ride this one out for while before you start making money.
Notice all 3 analysis charts and you'll see the difference. The green line represents the option while the white is the stock. The vertical axis defines your profit in $ while the horizontal represents the stock price.
The Single Calendar:
Notice how you only get one place where you profit the most, which is right at the center at 70. Also, the probability of this stock hitting this sweet profit spot is less than the other 2 strategies.
The Double Calendar:
So, even though you get higher probability here than with the single, you have the huge dip in the middle of the 2 peaks which means you don't profit upon entry (notice the red dotted line in the middle-this is the "mark" or where the stock currently is compared to this trade). You have to wait a while or the stock has to move in one direction or the other for you to profit.
The Triple Calendar:
So here, even though we get slightly less probability than the double, you have much more of a profitability sweet spot. So I am choosing this one.
You treat a triple calendar just like any other calendar.
We will add up our total credits and debits to calculate the yield.
Bought Jul 65 Call -$8.00
Bought Jul 70 Call -$4.60
Bought Jul 75 Call -$2.10 debit of $14.70
Sold Apr 65 Call +$6.50
Sold Apr 70 Call +$2.70
Sold Apr 75 Call +$0.52 credit of $9.72
for a total debit of $4.98
That gives me a yield of 9.72/14.70= 66.1% in 1 month
Exit Strategy: If the stock moves up against me, then I will close out the bottom calendar, and if it heads down against me, then I will close out the top calendar.
Ok last one for the day....
A fellow trader brought up that UPS was in a solid channel between 65 and 75. So some of us tossed around the ideas of doing either a single call calendar at 70, a double calendar at 65 and 75, or a triple at 65, 70 & 75.
Of the 3, the analysis of the triple was the best because you get the best of both worlds. You get a breakeven spread that's still further out than the single. And you make money faster because now instead of 2 profit peaks on the analysis tab you get three. With the double, you get the 2 peaks, but a huge dip in the middle which means 0 profit initially-you'd have to ride this one out for while before you start making money.
Notice all 3 analysis charts and you'll see the difference. The green line represents the option while the white is the stock. The vertical axis defines your profit in $ while the horizontal represents the stock price.
The Single Calendar:
Notice how you only get one place where you profit the most, which is right at the center at 70. Also, the probability of this stock hitting this sweet profit spot is less than the other 2 strategies.
The Double Calendar:
So, even though you get higher probability here than with the single, you have the huge dip in the middle of the 2 peaks which means you don't profit upon entry (notice the red dotted line in the middle-this is the "mark" or where the stock currently is compared to this trade). You have to wait a while or the stock has to move in one direction or the other for you to profit.
The Triple Calendar:
So here, even though we get slightly less probability than the double, you have much more of a profitability sweet spot. So I am choosing this one.
You treat a triple calendar just like any other calendar.
We will add up our total credits and debits to calculate the yield.
Bought Jul 65 Call -$8.00
Bought Jul 70 Call -$4.60
Bought Jul 75 Call -$2.10 debit of $14.70
Sold Apr 65 Call +$6.50
Sold Apr 70 Call +$2.70
Sold Apr 75 Call +$0.52 credit of $9.72
for a total debit of $4.98
That gives me a yield of 9.72/14.70= 66.1% in 1 month
Exit Strategy: If the stock moves up against me, then I will close out the bottom calendar, and if it heads down against me, then I will close out the top calendar.
OPEN: LVS Put Cal.,USO Time Diag., TGT Dbl.Put Cal., POT Put Cal., SHLD Put Diag.
Today I opened several trades along with my trading partners:
Also, I am now doing trades within 2% of my total portfolio size. I moved up from 1% from last month since I had several winnings trades. This is a great discipline strategy to employ when you've had some losers and/or you are starting to get emotional about your trading. If you are experiencing any one or two of these issues, then minimize your risk by sizing small 1% or less of your total portfolio until you have a string of winners and are less emotional about your trades.
LVS Put Calendar:
Sold April 85 for $11.75 and bought the Jun 85 put for $14.45. My total debit on this trade was $2.70.
This gives me a yield of 11.75/14.45= 81% in 1 month
I will roll the short leg to May once the stock gets close again to the middle of the trading range at 85.
TGT Double Put Calendar:
The chart is neutral to bearish currently with consolidation around 52.50. I put on a double calendar at 47.5 to hedge myself in case this breaks downward out of my trading range on the 52.50 calendar. Looking at the probabilities, this allows me to make my money within the first few days instead of having to wait about a week to start profiting. This is my first double calendar so we'll see how it all works out.
Bought Jul 47.5 put for $4.10
Sold Apr 47.5 put for $1.80 for a net debit of $2.30
Bought Jul 52.5 put for $6.50
Sold Apr 52.5 put for $4.15 for a net debit of $2.35
So this gives me a yield of: credit (1.80+4.15)/debit (4.10+6.50)= 5.95/10.60= 56% in 1 month
POT BLPS:
With a perfect bullish engulfing candle and a bounce up off the 30 day moving average today, I got filled on a bull put spread. Next earnings announcement isn't until 4/21/08 so I have time to get out before that volatility craziness.
Sold April 135 put for $4.00
Bought Apr 130 put for $2.93 for a net credit of $1.07
Risk is 5.00-1.07=3.93 (position sized according to risk)
Net yield is 1.07/3.93= 27.2% in a few weeks
As long as the stock stays above 135, I'm good to stay in and let this one expire, or choose to close out whenever I want.
USO Time Diagonal:
So the time diagonal is kind of like a vulture but with a little more time on the long side.
Oil companies have been kicking a lot of butt lately as is evident with the cost at the pump!
USO ranks as one of the top companies in the oil industry with a nice break through resistance recently around $77.50. Now it's at it's 2 year high.
What we are doing is actually a counter-trend trade. WARNING: not for beginners or for those risking a huge pot!
Despite the trend of the stock (bullish), we looked at the MACD on this one (although it is a momentum indicator, we normally don't use this indicator because it's slow), and noticed that the MACD has a bearish trend right now-signaling to us that this baby may run out of steam. (look at the trend lines I drew on MACD). Also, volatility is jumping up which means there is a sense of fear here among investors (what goes up must come down).
So we Bought the Apr 91 Call for $2.50
and Sold Mar 90 Call for $0.82 giving a total debit of $1.68.
0.82/2.50= 32.8% yield in 1 week. We will roll the Mar to Apr to close out or possibly convert this to a calendar by rolling the long further out in time and rolling the short to April if this starts creating a channel. Or if it still trends, but downward, then we will convert this to another BRCS.
This trade is sized for maxed loss.
SHLD Put Diagonal:
Sold Apr 85 put for $3.00
Bought Jun 105 put for $19.55 for a net debit of $ 16.55.
3.00/19.55= 15.3% yield in 1 month
Also, I am now doing trades within 2% of my total portfolio size. I moved up from 1% from last month since I had several winnings trades. This is a great discipline strategy to employ when you've had some losers and/or you are starting to get emotional about your trading. If you are experiencing any one or two of these issues, then minimize your risk by sizing small 1% or less of your total portfolio until you have a string of winners and are less emotional about your trades.
LVS Put Calendar:
Sold April 85 for $11.75 and bought the Jun 85 put for $14.45. My total debit on this trade was $2.70.
This gives me a yield of 11.75/14.45= 81% in 1 month
I will roll the short leg to May once the stock gets close again to the middle of the trading range at 85.
TGT Double Put Calendar:
The chart is neutral to bearish currently with consolidation around 52.50. I put on a double calendar at 47.5 to hedge myself in case this breaks downward out of my trading range on the 52.50 calendar. Looking at the probabilities, this allows me to make my money within the first few days instead of having to wait about a week to start profiting. This is my first double calendar so we'll see how it all works out.
Bought Jul 47.5 put for $4.10
Sold Apr 47.5 put for $1.80 for a net debit of $2.30
Bought Jul 52.5 put for $6.50
Sold Apr 52.5 put for $4.15 for a net debit of $2.35
So this gives me a yield of: credit (1.80+4.15)/debit (4.10+6.50)= 5.95/10.60= 56% in 1 month
POT BLPS:
With a perfect bullish engulfing candle and a bounce up off the 30 day moving average today, I got filled on a bull put spread. Next earnings announcement isn't until 4/21/08 so I have time to get out before that volatility craziness.
Sold April 135 put for $4.00
Bought Apr 130 put for $2.93 for a net credit of $1.07
Risk is 5.00-1.07=3.93 (position sized according to risk)
Net yield is 1.07/3.93= 27.2% in a few weeks
As long as the stock stays above 135, I'm good to stay in and let this one expire, or choose to close out whenever I want.
USO Time Diagonal:
So the time diagonal is kind of like a vulture but with a little more time on the long side.
Oil companies have been kicking a lot of butt lately as is evident with the cost at the pump!
USO ranks as one of the top companies in the oil industry with a nice break through resistance recently around $77.50. Now it's at it's 2 year high.
What we are doing is actually a counter-trend trade. WARNING: not for beginners or for those risking a huge pot!
Despite the trend of the stock (bullish), we looked at the MACD on this one (although it is a momentum indicator, we normally don't use this indicator because it's slow), and noticed that the MACD has a bearish trend right now-signaling to us that this baby may run out of steam. (look at the trend lines I drew on MACD). Also, volatility is jumping up which means there is a sense of fear here among investors (what goes up must come down).
So we Bought the Apr 91 Call for $2.50and Sold Mar 90 Call for $0.82 giving a total debit of $1.68.
0.82/2.50= 32.8% yield in 1 week. We will roll the Mar to Apr to close out or possibly convert this to a calendar by rolling the long further out in time and rolling the short to April if this starts creating a channel. Or if it still trends, but downward, then we will convert this to another BRCS.
This trade is sized for maxed loss.
SHLD Put Diagonal:
Sold Apr 85 put for $3.00
Bought Jun 105 put for $19.55 for a net debit of $ 16.55.
3.00/19.55= 15.3% yield in 1 month
Wednesday, March 12, 2008
CLOSE: XLE Put Calendar +100%
On 2/21/08, I opened the Apr 08/Mar 08 75 Put calendar for a $1.03 debit.
On 3/5/08, I rolled by buying back the Mar 75 put and selling the (Quarterlys) Mar5 08 for a credit of $0.48. My new cost basis is $0.55.
Today it's time to get out since we are approaching Mar expiration and the stock is currently around 75. This gives me the best chance to get the best credit to get out.
So I sold the Apr 08 & bought back the Mar5 quarterly 75 put for a $1.10 credit.
(1.10-.55) / .55 = 100% in 1 month!
On 3/5/08, I rolled by buying back the Mar 75 put and selling the (Quarterlys) Mar5 08 for a credit of $0.48. My new cost basis is $0.55.
Today it's time to get out since we are approaching Mar expiration and the stock is currently around 75. This gives me the best chance to get the best credit to get out.
So I sold the Apr 08 & bought back the Mar5 quarterly 75 put for a $1.10 credit.
(1.10-.55) / .55 = 100% in 1 month!
Thursday, March 6, 2008
CLOSE: GDX Put Calendar +20.9%
On 1/31/08, I opened the put calendar by buying the JUN 08/selling the MAR 08 51 PUT for a $2.15 debit.
I closed out this trade today for a $2.60 credit.
(2.60-2.15) / 2.15= 20.9% in 1 month!
I closed out this trade today for a $2.60 credit.
(2.60-2.15) / 2.15= 20.9% in 1 month!
CLOSE: WMT Put Calendar +18.3%
On 2/8/08, I opened this trade by buying the JUN 08 put and selling the MAR 08 47.5 PUT for a $1.20 debit.
Today I have decided to get out of this trade because it looks like it's forming an ascending triangle pattern (signaling possible bullish trend).
I got credit of $1.42.
(1.42-1.20)/1.20= 18.3% in 1 month
Today I have decided to get out of this trade because it looks like it's forming an ascending triangle pattern (signaling possible bullish trend).
I got credit of $1.42.
(1.42-1.20)/1.20= 18.3% in 1 month
ADJUST: ZMH Call Calendar to BRCS
Today I did some adjusting on this trade. I did a double trade that converted this call calendar to a bear call spread.
On 2/8/08, Bought Jun 65 Call for $14.75 and Sold Mar 80 Call for $2.00 for a total debit of $12.75.
On 2/19, I adjusted my position by buying back the Mar 80 and selling to Mar 75 call for $1.95 credit.
Today, I closed out the calendar Apr 08/Mar 08 75 Calls for a $1.15 credit.
Then I sold the Jun 65 for $13.15 & bought the Jun 75 Calls for $5.95 for a total $7.20 credit.
This has now brought my cost basis down to $2.45.
My new risk is 10.00 vertical strike difference-7.20 credit= $2.80
On 2/8/08, Bought Jun 65 Call for $14.75 and Sold Mar 80 Call for $2.00 for a total debit of $12.75.
On 2/19, I adjusted my position by buying back the Mar 80 and selling to Mar 75 call for $1.95 credit.
Today, I closed out the calendar Apr 08/Mar 08 75 Calls for a $1.15 credit.
Then I sold the Jun 65 for $13.15 & bought the Jun 75 Calls for $5.95 for a total $7.20 credit.
This has now brought my cost basis down to $2.45.
My new risk is 10.00 vertical strike difference-7.20 credit= $2.80
CLOSE: UAUA Iron Condor -24%
On 2/7, I opened this trade as a bull put spread by selling Mar 30 put & buying Mar 25 put for credit of 0.85.
Then on 2/22 I turned it into an Iron Condor by adding a bear call spread to hedge myself by selling the Mar 40 call and buying the Mar 45 call giving me a total credit of $0.77.
0.85 (original credit) + 0.77 (today's credit)= $1.62 total credit
New max risk is 5.00 - 1.62 credit= $3.38
Today, this trade has gone against me so I closed it out for a $2.43 debit.
(1.62-2.43)/3.38= -24% loss in 1 month
Then on 2/22 I turned it into an Iron Condor by adding a bear call spread to hedge myself by selling the Mar 40 call and buying the Mar 45 call giving me a total credit of $0.77.
0.85 (original credit) + 0.77 (today's credit)= $1.62 total credit
New max risk is 5.00 - 1.62 credit= $3.38
Today, this trade has gone against me so I closed it out for a $2.43 debit.
(1.62-2.43)/3.38= -24% loss in 1 month
Wednesday, March 5, 2008
ADJUST: XLE Put Calendar Mar75 to Mar Quarterly 75 Put
On 2/21/08 I opened the Apr 08/Mar 08 75 Put calendar for a $1.03 debit.
Today I rolled by buying back the Mar 75 put and selling the (Quarterlys) MAR5 08 for a credit of $0.48. This is cool cause you can get that extra roll just from the quarterlys instead of only 1 from Mar straight to April.
My new cost basis is $0.55.
Today I rolled by buying back the Mar 75 put and selling the (Quarterlys) MAR5 08 for a credit of $0.48. This is cool cause you can get that extra roll just from the quarterlys instead of only 1 from Mar straight to April.
My new cost basis is $0.55.
Monday, March 3, 2008
CLOSE: JPM Put Calendar -4.5%
On 2/7/08 I sold Mar 45 put for $ 2.87 and Bought the Jun 45 put for $4.65 for a total debit of $1.78.
Today it has dropped significantly and forming a trend instead of a channel on high volatility and volume. Since I don't know yet how best to adjust calendars when they go against you, I felt it was best to pull the plug early before I get stopped out. I closed the trade for a credit of $1.70.
(1.70-1.78)/1.78= -4.5% loss in 1 month
Today it has dropped significantly and forming a trend instead of a channel on high volatility and volume. Since I don't know yet how best to adjust calendars when they go against you, I felt it was best to pull the plug early before I get stopped out. I closed the trade for a credit of $1.70.
(1.70-1.78)/1.78= -4.5% loss in 1 month
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