Stock and Options Spread Trading

[SpreadTraderOpt]

Hello everyone!

I am starting a new trading journal that keeps track of my stock and options trades and adjustments.

Favorite trades:
Collar Trade, Covered Call, ITM Covered Call, Call Calendars, Put Calendars, Long Calls, and Bull Puts.

Goals of this journal is to keep track of my trades.

If possible I like to adjust loosing position to make them winning ones. I also like to use options to hedge or protect my whole portfolio.

1st Trade: NFLX Collar Trade

I have always liked Netflix and I use their service and love it. Always trade something that you know and love right? Well for my first trade that is what I am doing.

Trade Details:
Buy the stock at 138.56
Sell a Sept 145 SP at 6.95
Buy a Sept 135 LP at 7.65

See attachment for details on secondary exit points.

After I placed this trade the stock has already dropped, but I am not worried because I have the short call lowering my cost basis and the long put protecting me.

If I have to say this:
This is not advice to buy or sell this stock or option.

 

[SpreadTraderOpt]

NFLX has been showing bearish movement because of a downgrade and HBO maybe coming out with a service called HBO Go.

I have rolled my short call and long put down to new strike prices.

My old Cost Basis was 139.26 and after the rolls my new cost basis is 135.03.

I rolled the short call down to the 140 strike price. I closed the 145 SC for $2.62 and then opened a new SC at 140 for $3.70.

I rolled the LP down to the 130 strike price. I closed the 135 LP for $13.30 and then opened up the 130 LP for 10.15.

I now have the obligation to sell at $140 which gives me a max reward of $4.97. My max loss right now is 5.03 because I have the right to sell at $130. However, I will not take the max loss because I will roll down the SC and LP again if it drops below 125.

NFLX is at 127.65.

 

[SpreadTraderOpt]

what a drop!

This is why I love collar trades the stock price has dropped over 10 dollars from the price that we bought it at but we are pretty much at breakeven, only down .62 cents a share!

 

[SpreadTraderOpt]

NFLX is still looking good. I am thinking about rolling the long put out in time because time decay is starting to erode the value of the long put.

Today I also placed a covered call on DNDN - I sold to open an October 39 Call to get $2.54 and bought the stock at $37.55. My total risk in the trade is $35.01. My risk is that because I am getting 2.54 cents per share with the short call.

My primary exit point is to let the stock get called out at $39. My secondary exit point would be to adjust to add a long put to adjust to a collar trade. I can also roll my short call down and out or just down to bring in more credit.