HUH's crash and burn trading thread

Quote from valpak:

I thought so. I have to admit that you have a good way to explain things. You should start your own service. Put it on collective2.com...
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Naaaa I've got a full time job that I enjoy. This is a side hobby that after many years has become profitable. Although if I find myself suddenly unemployed....:eek:

Anyway, today I decided to make a slight change in my june positions. I decided to close one of my 480/470 jun put positions and open a 500/490 june put position instead as I think there is more upside possible next week. I did the following:

sell 480/470 june put vert for $487.64
bot 47 iwm junQ put for $530.75

So I had to pay $43.11 to close this position out. However, I received a credit of $66.49 when initially opening this position so closing this results in a profit of 66.49-43.11 = $23.38.

Here is a complete list of my current open positions as well as closed positions, and note I added a 500/490 june position as well today.

Closed positions
mar 480/490 call/short marQ 49 iwm call @ profit of $44.60
mar 460/470 call/short marQ 47 iwm call @ profit of $51.28
short feb 46 iwm call@ profit of $148.88
bot feb 450/460 call/short feb 46 iwm call@ profit of $182.51
bot feb 500/490 put/short feb 49 iwm put@ profit of $224.6
bot feb 510/500 put/short feb 50 iwm put@ profit of $178.88
bot feb 520/510 put/short feb 51 iwm put@ profit of $314.88
bot feb 520/510 put/short feb 51 iwm put@ profit of $200.88
bot feb 530/520 put/short feb 52 iwm put@ profit of $157.28
bot jun 480/470 put/short junQ 47 iwm put@ profit of $23.38

Open positions
bot feb 440/450 call/short feb 45 iwm call@ cost of $137.06
bot feb 440/450 call/short feb 45 iwm call@ cost of $163.54
bot feb 450/440 put/short feb 53 iwm put@ credit of $297.82
bot feb 450/440 put/short feb 53 iwm put@ credit of $278.82
bot mar 420/430 call/short mar 43 iwm call@ cost of $153.06
bot mar 410/420 call/short mar 42 iwm call@ cost of $128.54
bot mar 480/470 put/short mar 47 iwm put@ cost of $133.06
bot mar 490/480 put/short mar 48 iwm put@ cost of $172.06
bot mar 490/480 put/short mar 48 iwm put@ cost of $183.06
bot jun 420/430 call/short junQ 43 iwm call@ cost of $2.21
bot jun 420/430 call/short junQ 43 iwm call@ cost of $2.21
bot jun 420/430 call/short junQ 43 iwm call@ credit of $1.89
bot jun 480/470 put/short junQ 47 iwm put@ credit of $56.89
bot jun 500/490 put/short junQ 49 iwm put@ credit of $60.64

Have a good weekend and get ready for a truly wild week next week with the bad bank and stimulus plan passing next week!
 
I added another june put today and I'll do one of two things tomorrow. If we rally above 470 tomorrow then I will go ahead and close my remaining 480/470 june put position for a small profit. On the other hand, if we drop down to the 460 level I will add another June call position.

bot jun 500/490 put/short junQ 49 iwm put@ credit of $46.89
 
Nice pullback today as we were too overbought on the short term, so this pullback should setup nicely for a significant bounce when the stimulus package passes later this week. We're coming up on that 440 zone where the bears' balls seem to shrink everytime we get to this level lately. We'll have to see over the next couple of days if this is another case where the bears are going to experience shrinkage and we can get a couple of days of consolidation to setup for the next move up, or can the bears actually nut-up and do some meaningful damage. All we've done is erase the market gains from last week, so essentially the market has been flat for the past 5 or 6 trading days which is great for sucking out premium from my hedges.

I still believe we are going higher (500+) on the RUT before the end of the march option cycle so I'm now watching for a good opportunity to lock profits on my march positions. If I'm wrong and we head down (There's a 50% chance of this :)) then I'll adjust accordingly. Right now I'm not too concerned until we breach the 420 level to the downside on the RUT.

I added the following june call position today:
bot jun 430/440 call/short junQ 44 iwm call@ cost of $23.51
 
I believe by the time you posted this, the stimulus package already passed. It happened before market closed so not sure why you are still betting on stimulus package to pass.
 
Quote from valpak:

I believe by the time you posted this, the stimulus package already passed. It happened before market closed so not sure why you are still betting on stimulus package to pass.
More...

I think whats passed so far is the Senate version of the bill which has differences with what was passed by the house. So now the house and senate has to get together and hash out the differences so there is just 1 final bill which will get voted on and passed to Obama for final approval. So there are still some questions about what is staying in the bill and what isn't when the house and senate get together.
 
Nothing much to comment on. The final stimulus bill should get signed by Obama next monday so its a matter of waiting and seeing what the market reaction is. Once again the bears failed miserably at doing any real damage which is fine since consolidation is my preference anyway. Today I made a couple changes. I added the following june positions:

bot jun 420/430 call/short junQ 43 iwm call@ cost of $32.76
bot jun 410/420 call/short junQ 42 iwm call@ cost of $13.36

I also closed the following june call position for $56.89 and the original cost was $23.51 which results in a small profit:

bot jun 430/440 call/short junQ 44 iwm call@ profit of $33.38

There's probably people scratching their heads saying whats the point of making 33 bucks. Well its easier to try and identify a trading range for the market for the next couple of months. Its SIGNIFICANTLY more difficult to try and predict a probable trading range going 3 or 4 months out. So typically I'll let shorter term positions like my feb and mar positions run for quite awhile before closing them because these positions give you more bang for the buck when the market moves and the faster time decay. The positions out in June on the other hand don't really react as much to market movement.

As I've said before, its much easier to adjust a position that has a lot of time left till expiration like June, versus a position like my feb or march which expire sooner. Do I think that theres a good probability that the RUT will hang around between 380 and 520 close to the March option expiration, sure thats why I'm holding my mar options for over a month! Now do I think theres a good chance that the RUT will stay between 520 and 380 when the june option expiration approaches.....sure but the probability is small thats why I am essentially scalping in and out of my June positions. Until we get a meaningful move (rut over 500 or under 400) my June positions are essentially low volume scalps and my closer options in feb and march will be the actual positions I'm counting on to make serious coin. If we see a major rally that blasts through 520 next week then my June call positions won't have a massive loss because there's so much time left and thats why I"m not too afraid to go out to June for positions.

Anyway, lets see what the next 5 trading days bring as we close out February cycle (which seems like an eternity!).
 
Nice quiet day going into the long weekend. Market is closed on Monday as well. My march positions have swelled a decent amount in profits so if we get a couple more relatively flat days next week then I may start closing them out as well. I've added another june put position today as well. Here is also the updated list of my current closed and open positions.

Closed positions
mar 480/490 call/short marQ 49 iwm call @ profit of $44.60
mar 460/470 call/short marQ 47 iwm call @ profit of $51.28
short feb 46 iwm call@ profit of $148.88
bot feb 450/460 call/short feb 46 iwm call@ profit of $182.51
bot feb 500/490 put/short feb 49 iwm put@ profit of $224.6
bot feb 510/500 put/short feb 50 iwm put@ profit of $178.88
bot feb 520/510 put/short feb 51 iwm put@ profit of $314.88
bot feb 520/510 put/short feb 51 iwm put@ profit of $200.88
bot feb 530/520 put/short feb 52 iwm put@ profit of $157.28
bot jun 480/470 put/short junQ 47 iwm put@ profit of $23.38
bot jun 430/440 call/short junQ 44 iwm call@ profit of $33.38

Open positions
bot feb 440/450 call/short feb 45 iwm call@ cost of $137.06
bot feb 440/450 call/short feb 45 iwm call@ cost of $163.54
bot feb 450/440 put/short feb 53 iwm put@ credit of $297.82
bot feb 450/440 put/short feb 53 iwm put@ credit of $278.82
bot mar 420/430 call/short mar 43 iwm call@ cost of $153.06
bot mar 410/420 call/short mar 42 iwm call@ cost of $128.54
bot mar 480/470 put/short mar 47 iwm put@ cost of $133.06
bot mar 490/480 put/short mar 48 iwm put@ cost of $172.06
bot mar 490/480 put/short mar 48 iwm put@ cost of $183.06
bot jun 420/430 call/short junQ 43 iwm call@ cost of $2.21
bot jun 420/430 call/short junQ 43 iwm call@ cost of $2.21
bot jun 420/430 call/short junQ 43 iwm call@ credit of $1.89
bot jun 480/470 put/short junQ 47 iwm put@ credit of $56.89
bot jun 500/490 put/short junQ 49 iwm put@ credit of $60.64
bot jun 500/490 put/short junQ 49 iwm put@ credit of $46.89
bot jun 420/430 call/short junQ 43 iwm call@ cost of $32.76
bot jun 410/420 call/short junQ 42 iwm call@ cost of $13.36
bot jun 480/470 put/short junQ 47 iwm put@ credit of $16.49
 
Finally we get some resolution to the tight trading range we've been in. My thought was we would break to the upside so I'm going to enjoy eating my crow and now I'll be watching to see if we do head to 400. First up, I'm watching to see if we get a close below 420. If we get a close below 420 before friday then I'll have to decide what I want to do with my 440/450 feb box spread. There's not much that can be done adjustment wise with just 2 full trading days left. There is some hope that we might get a small bounce due to short covering the next couple of days but as long as 400 holds it should still be a profitable position.

If we close below 410 then I will start to look at doing some work on my march and june put positions. So far all we have is a small breakdown on the RUT which isn't confirmed yet so don't want to start doing adjustments left and right and have it turn out to be a false breakdown. I'm going to give it a day or two to see if 440 has now become resistance, if it has then I will start looking at setting up positions for a new trading range which is basically between 370 and 440. I also have my two initial levels at 420 and 410 that will force action if they are violated so lets see what happens next.

Today I added the following call position for june:
bot jun 410/420 call/short junQ 42 iwm call@ cost of $48.36
 
Just barely held 420 today, kinda seems like its hanging on by a string. We look pretty oversold on the near term thats why I was hoping to get a short covering bounce before friday. Obviously we didn't get it today so I covered 1 of my short 53 feb puts. Here is what I did:

bot feb 450/440 put/short feb 53 iwm put@ credit of $297.82

For the above position I closed the 53 iwm put for $1095.7 which results in the following:

bot feb 450/440put @ cost of (1095.7-297.82) = $797.88

The plan for this position was to match it up with my long 440/450 feb call spread to create a box so all I need to do is cover my short 45 call which is trading for .08 and it'll be a box with a small profit. Pretty irritated to be walking away with such a small profit for this position but oh well.

I left my other 450/440 short 53 feb iwm position alone for today. Like I said, we look oversold and I am hoping to get at least a small short covering bounce tomorrow so that I can close the remaining 53 iwm for a lot less than 1095! If it looks like that ain't happening in the morning then I'll just close it for whatever I can get.
 
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