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).
Thursday, May 15, 2008
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
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