HUH's crash and burn trading thread

Oh greed can be such a pain! I had my short covering rally in the morning where I could have closed my remaining feb 53 iwm put for as low as around 1015 but I got greedy and didn't do it. Now I'm stuck holding it still and right now its around 1130. By all accounts I should have closed this position out this morning but I decided to gamble a bit with it. My reasoning for the gamble is:

-We are now HORRIBLY oversold in the short term and due for a bounce.
-There's no better time to screw a lot of premium sellers than to manipulate the market higher from an oversold condition on option expiration friday morning. I would not be shocked at all to see a 10+ point move higher in the first 20 minutes tomorrow while the monthly screw job takes place and I should be able to close the 53 iwm for under $1100.
-Finally the last piece as to why I am letting this position run is that my breakeven for this 440/450 feb box is about $1113 (This is how much I would have to pay to close the feb 53 iwm before I start taking a loss) Since I have had a good month so far I am willing to give this position a little slack.

So anyway, I did several closures today so here is the list:
I bought back one of my 45 feb call positions for $8.70 which means I now have a 440/450 feb box spread that has a cost of $797.88(cost of buying 450/440 put and from closing the 53 put yesterday) + 8.70 (cost of closing 45 call today) + 137.06 (cost of buying the 440/450 feb call spread) = $943.64
This position will pay 1000 no matter what happens to the RUT tomorrow so this position is esentially closed for a profit of $56.36.

I also closed
-bot mar 420/430 call/short mar 43 iwm call for $318.94 which results in a profit of $165.88
-bot mar 490/480 put/short mar 48 iwm put for $286.94 which results in a profit of $114.88
-bot jun 420/430 call/short junQ 43 iwm call for $111.89 which results in a profit of $109.68

One bad sign from today is that we basically hit the 430 level this morning and sold off which is not good if that previous 430-440 support level has now become resistance. Right now its not a clear resistance level since its option expiration week but if that level holds on Monday then a move to the 370-385 level seems HIGHLY LIKELY. Either way I am watching for a close below 410 right now to do some work on protecting some put positions.
 
Damn lady luck just is not on my side the past few weeks. I have been DEAD WRONG about market direction and today is no exception. Settlement did not help me by causing a BS rally so I am still holding my short 53 feb put. My only hope now is that we get a EOD short covering rally where shorts decide to take profits before the weekend. Otherwise if we hit 40 on IWM today then I'll close the put immediately.
 
I was hoping for higher RUT settlement too but to my surprise it went opposite. I think they found more to screw on other side this time. Damn SET! I am with you in this hate!
 
Boy these 5 week option cycles seem like an eternity. The final 53 iwm was closed today for $1186. All in all it was a good option cycle. Just had a couple of bad positions hurt my pride more than my portfolio but oh well. Here is the list of all the positions that were closed this option cycle and the return for the month:

Closed positions
short feb 46 iwm call profit of $148.88
bot feb 520/510 put/short feb 51 iwm put profit of $314.88
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 $200.88
bot feb 530/520 put/short feb 52 iwm put profit of $157.28
bot feb 450/440 put/short feb 53 iwm put profit of $202.12
bot feb 450/440 put/short feb 53 iwm put profit of $92.82
bot mar 420/430 call/short mar 43 iwm call profit of $165.88
bot mar 490/480 put/short mar 48 iwm put profit of $114.88
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
bot jun 420/430 call/short junQ 43 iwm call profit of $109.68
bot jun 420/430 call/short junQ 43 iwm call profit of $114.43
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
bot feb 440/450 call/short feb 45 iwm call loss of ($145.76)
bot feb 440/450 call/short feb 45 iwm call loss of ($163.54)

Total profit for feb cycle = $2051.06

So far we have the following returns:
Jan cycle = $683.17
Feb cycle = $2051.06
Total gain = $2734.23
Percent return = 2734.23/30000 = 9.11%
Goal = 30-9.11 = 20.89% until goal reached.
 
I am beginning to adjust my 500/490/short 49 iwm put. With the market hanging around the 410 level I decided to go ahead and purchase the June 410/400 put spread. As with last month, I will typically sell the 500/490 spread in order to fund the purchase the of the 410/400 adjustment spread, however I was not getting the price I want for selling the jun 500/490 spread. I am going to continue to try and work the sell order on the 500/490 at a price I want until 1 of following 3 things happen:

1) The market rallies higher next week which means my 410/400 spread will lose a little bit of money, HOWEVER a rally up to the 440 level would be a huge benefit for my mar positions that would significantly more than offset the loss on this 1 spread not to mention the gains in the rest of my june positions.

2) The market will consolidate at these levels which means the 500/490 spread will gain in value as time premium decays and I will get my price.

3) The market sells off towards new lows at 370 in which case I'll be very happy that I bought this spread as it gives me a little more breathing room, and I'll be able to sell my 500/490 spread for even more than what I'm trying to sell it for now.

So moral of the story is I will get my price for the 500/490 no matter what or benefit considerably from a rally! :D

I also closed one of my Jun 420/430 positions (I recorded the profit for this in the feb option cycle in the post above) and I established a new Jun call position at the 380/390 level. Here is a list of the current open positions going into the march cycle:

Open Positions
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 $183.06
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
bot jun 410/420 call/short junQ 42 iwm call@ cost of $48.36
bot jun 380/390 call/short junQ 39 iwm call@ cost of $58.11
bot jun 410/400 put @ cost of $467.36
 
Good news for you! Apr and May IWM as well as RUT is now available. You don't have to go to June any more. How would you describe profitability and tradeability in terms of going out all the way to June Vs your original idea of staying withing 8 weeks range?
 
Quote from valpak:

Good news for you! Apr and May IWM as well as RUT is now available. You don't have to go to June any more. How would you describe profitability and tradeability in terms of going out all the way to June Vs your original idea of staying withing 8 weeks range?
More...

I'm actually looking at this more since this is the first time I had to go way far out like June. When I was paper testing this the most I went out was 3 months so going to June which was 4 months was a live test. I actually have liked my June positions as the value hasn't changed that much versus the shorter duration options move considerably in value. The problem is we havent' had a very significant move in the market yet to really test this. I'm going to see how the june options fare profit/loss wise once they are closed to judge how well they do. It might end up that I may decide to switch to 4+ month contracts if the long term contracts test well. I have to admit that so far I'm surprised at how well the June puts and calls have behaved thus far.

As far as tradeability, the b/a on the RUT and even the IWM are pretty wide on the June contracts which is irritating compared to the short term contracts so thats one issue. So I guess my answer would be lets wait and see how the June contracts shake out and we can do a comparison.
 
More down action which means more adjustments :)
Here is what I did today:

I sold my mar 410/420 call spread for $382.64 which means the
bot mar 410/420 call/short mar 42 iwm call@ cost of $128.54
becomes
short mar 42 iwm call @credit of $254.10

I sold both of my 500/490 June puts for $798.24 each and also bought another 410/400 june put for $517.36. Combine this with the 410/400 june put I bought last friday then the following two positions:
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
become
bot jun 410/400 put/short junQ 49 iwm put@ credit of $391.52
bot jun 410/400 put/short junQ 49 iwm put@ credit of $327.77

The reasoning again is that I am counting on other positions to benefit enough to offset any losses that occur from these adjustments. So if we rally in the short term then my mar 42 call will be in trouble, but then I'll be benefiting from my other 2 march put positions gaining in value. My june 410/400 will lose a little bit of value but I'll get benefit from the 49 iwm puts losing more value than the 410/400.

If the market consolidates then I benefit from time decay across the board.

If the market sells off then I will get some additional help from the 410/400 spreads and being short the iwm 42 call. So I'll be in better shape than I would have been in if I did nothing.

The main danger is if we get a massive selloff that is sustained by which I mean we go below 350 and actually stay below 350 for the next 4 weeks. I buy the argument that we might hit 350 or 300 in the next 4 weeks but I would expect a nice short covering/bear market rally to take us back to and above 350 by end of march cycle. If we were in a situation where we were breaking down with only a week or two before expiration then I'd be more concerned but right now we have plenty of time to let the market do its thing.

So anyway, sorry about the long post but I also added a may call position (april pricing was crap).

OPEN POSITIONS
short mar 42 iwm call @credit of $254.10
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 $183.06
bot may 370/380 call/short may 38 iwm call@ cost of $168.06
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 410/400 put/short junQ 49 iwm put@ credit of $391.52
bot jun 410/400 put/short junQ 49 iwm put@ credit of $327.77
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
bot jun 410/420 call/short junQ 42 iwm call@ cost of $48.36
bot jun 380/390 call/short junQ 39 iwm call@ cost of $58.11
 
Today I closed the following position for $116.49:
bot jun 420/430 call/short junQ 43 iwm call@ credit of $1.89

Since the position was opened for a credit that means closing this position out created a profit of $118.38.
 
I did another swap out today. I closed my last remaining June 420/430 call position and opened a new may 370/380 call position. The goal is to try and keep the RUT spreads in the money as long as possible and since the june 420/430's are out of the money I went ahead and decided to take profit there and open another ITM may call. I am still confident that we can get at least one more move up into the 420-430 range before march expiration which should be enough for me to close out my march positions for the desired profit. If I am wrong and the market just sells off then the may 370/380 call positions going out of the money will generate additional profit since the short 38 IWM will lose more than the 370/380 RUT spreads. If we rally then at least I can go ahead and close out march positions and then we'll be dealing with may and june.

Here is what I did today:

Today I closed the following position for $124.64:
bot jun 420/430 call/short junQ 43 iwm call@ cost of $32.76
This results in a profit of $91.88

I opened the following:
bot may 370/380 call/short may 38 iwm call@ cost of $188.06
 
You must log in or register to reply here.
Back
Top