Weinstein Trading and Fading

12-19-13

I started the day in pre-market and stayed in trades pretty much the whole day. I even traded Nike (NKE) in after hours for a bonus round. As a total the day was ok, but (IACI) was a thorn in my side as I carefully monitored my dual position with it and (BITA) at the same time.

My broker charges steep overnight short fees and since I can leverage intraday much higher than overnight, it's something I have to manage. As a result, I have to manage my size as the day moves towards the closing bell. All brokers enforce overnight limits so that's not unusual.

My best trade was (WOR) and my final execution had a dollar gain. (IACI) could have been, but again sometimes you don't get to pick your exit point. I left a lot of money on the table with (BITA) for the same reasons as (IACI). It was profitable, but I'm disappointed in the results because it would have paid me if I gave it a chance.

While I usually short strength, with (RAX) I shorted a bounce higher and that trade had limited success.

I had a total of eight trades and now am flat. I will watch (RHT) at the open tomorrow. It should have potential.

(ARIA) + 19

(BITA) + 66

(IACI) + 111

(NKE) + 171

(ORCL) + 9

(RAD) + 78

(RAX) + 52

(WOR) + 582

+ 1088
 
12-20-13

Bad day and no one to blame but myself. totally a rookie day and I zigged when I should have zagged.

First (ARIA) just about blew my head off with their announcement of entering the US market again and the never ending trading halts. Somehow I made it through that even though I had really large size on at the time of first halt and had visions of filling out applications at McDonalds (MCD).

The NYSE busted some trades within the following time:09:58:07-10:03:07AM EST and 10:09:55-10:14:55AM and I have a trade at 10:03:07AM, but it was on ARCA and I was told it wasn't going to get busted. Bummer as that was a stop loss trade near the high of the day. I thought it was too good to be true....

My unrealized loss was significantly higher than what I closed at, so in a sense it was more than a good recovery, and for that I'm happy, but what a awful way to start the weekend. I'm also happy I'm up for the week, especially after today's cluster.

On a positive note, I closed (BBRY) with a nice gain, but not in my own accounts...LOL At least they are happy.

I have some regrouping to do and I'm sure by Monday I will be ready to go back at it.

(ARIA) - 2430

(RHT) + 88

(TXT) - 1062
 
12-23-13

As expected, it was a slower than usual day. I don't expect much this week and I will take all I can get.

This weekend I worked on the last hour of trading with stocks that are showing strength and a certain pattern. I traded (TWTR) based on it and it made a few bucks, but not enough to matter. I think I will rewrite the code and see how it backtests with weak stocks in the last hour. In hindsight it seems kinda crazy to long stocks when they generally fall faster than they climb.

I had seven tickers today and as soon as I'm finished wirting this I will go to the one place I love the most, the mall. Just kidding, I don't hate the mall, but let's just say I don't often find myself there absent a compelling reason, like I failed to order the stuff I wanted online already (I'm sure I'm the only one....right?)

I shorted ACAD and most of them based on the Michael reversion to the whole number trade. (RGP) gave me a William signal that I exploited well. (MDP) was a news fade. I could have done better, but I was greedy when i should be and not when i should have. I guess I can complain, but who's going to take the time to listen?

I traded (ARIA) small when it turned out to the downside, scalping it near $7 a share.I tried to get more, but it never broke hard below, so with a minute to go in trading I took the small gain.

(TSRO) crashed hard in early trading and I started watching it near $29.20ish, but didn't start shorting until around $28.80. I need to work on this trading strategy much more. I'm consistently doing well with it, but I haven't fully worked out the sweet spot of risk/reward. Mostly going by my experience having my head handed to me when I tried to fade crashing stocks. I have to say the spikes lower in the afternoon were agreeable as I covered a bunch, only to reload higher.

(ACAD) + 49

(ARIA) + 63

(MDP) + 96

(RGP) + 138

(TSRO) + 163

(TWTR) + 13
 
12-24-13

Today wasn't my day for (TWTR), at least not up until now. I started shorting it in pre-market and scalped it with limited success for the first half of the shortened session. Then it decided to really take off and my system said the stock should break before close. I started getting heavy near the close, still looking for the break and it didn't happen in time before I moved from stock into options.

So I closed out the equity position and bought enough January puts to give me about the same amount of Delta (should have the same gain/loss via options). I covered some of the options when the stock broke, but it wasn't enough of a break to put a huge dent in the move, although the options were underwater too. A dip of $2ish should place the trade back into the win column, but I would like to see a little more.

The last move with (TWTR) became nuts yesterday, and today's move higher felt like a short squeeze more than anything.Obviously I can't know what the motivating reasons for buying the bird, but after three market up days on the back of very positive news, I like the fade setup.

(TSLA) was fun to trade. The good news trade worked well. I didn't short the stock directly, but rather used put options to mitigte the risk and to not burn away all my buying power. Two accounts I manage crushed it with (TSLA) because we traded some size. I did ok though and for what I thought would be a ultra slow day, I will take it.

The best trade today came from (ORMP), a pharma that was a bit crazy to say the least. It was called out to me in the chat room and when i pulled it up on the chart it was already trading well above my short entry level. I started pounding on it right away, including hitting bids, which I hate to do. It quickly fell lower reaching my covering bids within 90 seconds of my first entry.

It made another move higher and I hit it again, with even more total size at my largest, Granted i was a little early because it gave another short signal, but I already was there. Once again it came back for me and I booked even more gains.

I finally had one last, albeit smaller trade and called it good so I could focus on (TWTR)

So I end the day short (TWTR) via the Jan $67.50 puts that I expect to trade back and forth Thursday, unless (TWTR) crashed hard enough at the open that I simple exit then. Considering the shortened session and the spike in volume relative to an average full day, I think the odds favor the short side, at least right now.

(TSLA) P $435

(TWTR) P $133

(ORMP) 1055

(TWTR) - 1522

That leaves me up slightly for the day with an unrealized gain going into Thursday's trading session.
 
12-26-13

Overall, not a bad day. Better, much better than expected when I logged in during pre-market. About 90ish minutes before the opening bell (TWTR) was significantly higher than Tuesday's close, and I was long puts that have high IV. My problem of course was even though I know stocks will gap before falling during a blow-out, the premium decay after the open my cause it to turn into a loser.

What happened was the total opposite because the IV spiked right along with the price. It's easy to see why with the volume of both the stock and the options, but it's clearly armature hour because the volatility has risen to the point that buying lotto tickets start to appear as a reasonable strategy for retirement funds. Would you believe the puts I bought late Tuesday are worth more at the close on Thursday? As a result, and expecting premiums to fall, I covered earlier (and didn't add when I may have otherwise) than normal. In hindsight looking only at the Twitter price action, I still think it was the right move.

The volatility became so high that I shorted it expecting a reversion to the mean even there, regardless if the price fell. I shorted the first move higher and sold puts. It had room to go because I starting fading it and the put options not only held, they continued to move higher. I was red in both the stock and options for a while. I scalped around my position, not expecting to make anything in the stock, but rather just to keep my basis moving higher. It worked, and after the first major dip lower, I started to become more aggressive because large moves lower (intraday on 10 min chart) tend to have follow through after their bounce.

As a result, even though i wasn't trying to make anything from (TWTR) shares, it turned into a decent trade on it's own. I ended with a profit on both the hedge and shares as soon as the IV pulled in as expected. I have to admit it's always fun to watch puts fall in value because the stock is falling too. As soon as the demand for calls fell, it caused the puts to fall in value too.

I sold a couple of Friday credit spreads into the close. I'm risking about $6 to gain about $1 that it doesn't close above $75 on Friday. The real trade is a bet that the premium falls enough overnight that I get out about an hour after the opening bell with about 50-60 cents. A retracement to around the $72ish area will go a long way towards my goal.

(TWTR) Jan 67.5P + 445

(TWTR) Jan 70P +68

(TWTR) + 241
 
12-27-13

(TWTR) broke and in a big way today. The momo stock of December and maybe 2013 hit a wall of reality. I closed a nice gain with it, but I also started fading it because I was short $75 calls that expire today. It fell and fell without any bounces that I would have expected in the afternoon. I sold calls against some of the shares.

I knew I was in great shape when it was trading gap lower in premarket. I considered shorting shares, but since I was already exposed with the $75 calls, I didn't see a reason to get bigger.

I intended to cover all the shares but issues with order entry turned it unto an issue so they don't all have a hedge. In after hours, (TWTR) continued to fall and I added to the position and scalped it some. That caused a realized loss, but also significantly lowered my basis. I expect barring a gap lower on Monday to be able to write more calls and wind up sitting in pretty good shape. In fact, my basis is low enough that I can cover the calls I wrote and rewrite at or in the money calls and still make a nice return net net.

(TWTR) is indicating oversold on the 3 minute, 5 minute, 10 minute charts, so a dead-cat bounce shouldn't be a surprise to anyone Monday.

The $75 bear credit spreads I wrote yesterday worked great. I covered one at 6 cents, and I was even able to cover the $80 call hedge at 3 cents, which after commissions is still 2 cents more than expected. I didn't cover the second one and left that to expire along with it's hedge.

Around noon, I bought two (TWTR) "lotto tickets" for a dime each, $66 puts that expire today while the stock was trading around $67.80 ish. I covered for a much smaller gain than I could have, I was concerned that a bounce, any bounce would cause the premium to evaporate. I covered one at 24 cents, leaving me with the other fully paid for. With under 50 minutes of trading, I covered at 58 cents. Not really bad for what it was. I also in the mean time bought one for 6 cents and sold it for a dime. The only thing I would do different, and I tried and pulled it, is I wish I would have bought more.

I know it's easy to say that after the fact, but it really was a great way to play a total meltdown, which appears to be the case right from the word go. With only two, it was too binary for my style of scaling in and out. The perfect trade would have been to buy five units (hey, they're lotto tickets requiring the stock to continue on it's path, not going to get crazy), and scale in and out around my basis, but to also hold at least one unit until less than 15 minutes to the closing bell.

I wouldn't get the full $2.20 that they closed at, but I would have taken at least one trade above $1.60. After all, that's what lotto ticket should be. With that said, I'm happy with the way that I actually did trade them for as many units as I had.

So I end the day with small realized gain, and an unrealized loss with my covered calls that are now well out of the money for what I intended. If (TWTR) makes it to $66 at the open Monday, I will leave the calls alone, but otherwise, I'm not fully convinced the stock is broken, and the love fest will resume next week.

Twitter wasn't my only stock traded today. I also shorted (AMBA) above $32 for the Michael signal pullback to the round number. It worked perfect, although I didn't have many units on it.

(CTRP) was another trade that I tried to buy strength on a pullback. It broke support and I closed it out, but not before I screwed up my exit order and missed the window. I then traded it through the support and resistance lines and ended down a buck. I was happy with it considering it wasn't a stock that was playing well with me.



TWTR $75 bear credit spread net net + 190

(CTRP) - 1

(AMBA) + 69

(TWTR) $66 P + 66

(TWTR) - 149 (scalping and still long with some shares as covered calls)

follow me on twitter @robertweinstein
 
12-30-13

Decent day to start the week and almost end the year. Twitter (TWTR) is the main attraction and once again it put on quite the show. I managed to fade it half-way decently. Considering the moves and the repositioning of my option hedge (more like the stock is the hedge), I did ok, especially when viewed as a long position from Friday.

I closed out the $66 calls and moved to $63 and $65 Friday calls. I closed the $66s a little early, but it could have just as easily been a little late because of how far and fast the price action moved all over the board. At the close, the $65 is green and the $63 is about even. The time decay is usury and another swing north will bring the whole thing together.

I managed to make a couple of other trades today also. (NQ) moved higher after a new position was filed with the SEC. I went a little heavy, nothing crazy and took two kicks at the can. The second didn't yield much as I remained concerned it would make another leg higher and break the high of day. (NQ) was a William trade.

(CTB) gave a William signal and I messed up my exit, I should have made more, but didn't enter in the correct amount.

(TWTR) $66 C 324

(CTB) 39

(NQ) 1002

(TWTR) 62

1427
 
12-31-13

Last trading day of the year and it ended rather uneventful. I moved my (TWTR) hedge to provide more cover and made a couple of other trades. All in all, today was a wash intraday, but profitable from my position yesterday. The $63 call I wrote is finally in the money and the Theta is about 60 cents a day. Barring a big move downward on Thursday (I know, not a given), the positive hedging Delta will feel close to 1 because of the time decay if (TWTR) falls modestly. That was a big factor in not moving to a lower strike.

I did close out the $65 call in favor of the $60 deep in the money (although it's never deep in the money with Twitter) to gain enough of a hedge that if we drop to $60 again I can feel comfortable rolling over to the next week at a strike of maybe $55ish to stay protected while gaining option premium. Anyway, the timing was good on the rollover because my unrealized gain with the $60 isn't far off from the slight premium I paid to make it happen.

I did not trade Twitter today, first day in many, but I did trade (more like scalp) some Twitter puts when I thought the price may break lower. It did in fact break, but not before climbing and so my earliness resulted in a lower gain.

I hope you have a great and wonderful Happy New Year!!

See you in 2014

TWTR 62 P + 27

TWTR 65 C - 37

(HTZ) - 20

(NQ) + .50

+ 20
 
1-3-14

It was a slow start to the year, but that didn't stop (CSIQ) from removing today's productivity and profits. I tried to scalp it and that would have worked wonders. Instead, I decided that it should fall further and pulled my bids lower. Low enough that they were missed and as I added size my average cost basis didn't keep up with the folks who thought it should move higher.

I also closed (TWTR) covered call today for about even. I think it was a net loss of about $40 (half because of a poor exit on my part), but it was a winner overall because I had already sold a previous call and scalped the position for gains that didn't adjust the cost basis. Considering it was a repair of a bad trade, it was even a bigger win in my book.

I covered some of my CSIQ short in after hours. I didn't want to, it's a great short to be in, but my broker charges high and I mean really high borrow fees (they don't care for overnight short positions at all), so I cut my size in half and if the stock is holding up in pre-market, I will reshort again.

I'm writing this from a laptop in bed and I don't know the exact numbers but I believe the realized loss with CSIQ is about 650 give or take and if it drops as expected, the trade will still work out. Ideally, I get my size back on before the opening bell and it falls back to give me the entire amount plus some cheese. We'll see how that works out.
 
1-4-13

Friday I continued to trade (CSIQ) with success, especially in the morning session. Knowing that these setups often carry higher at the open, I was ready and shorted the initial pop and closed out a decent gain. Enough to break even for yesterday's miscalculation anyway. Two accounts other than my trading account crushed it because they entered long puts into the close and added at the open. I don't count their results here, but it's good to know that even in accounts that don't short stocks can still profit by using options when appropriate.

I didn't get the full gain I wanted on Friday, although the number of shares dropped as I took gains. After the move higher, I shorted once again and scalped it, which declined my realized gains, but raised my basis significantly. I didn't exit much of my position at the close like I did Thursday, but I did sell some puts to provide a (weak) partial hedge. The premium is high enough that I shorted slightly out of the money puts. The premium wasn't too high for me to enter non-trading accounts long for a dip.

The new love affair with solar doesn't appear to have legs. I issued a trade alert in Real Money Pro, and in my options newsletter and I expect the shares will have a hard time appreciating at a rate above the time decay in the front month.

The only other trade was with (CAMT) which was called out in the chatroom. It was a quick Michael reversion to the whole number on a small priced stock with only a few shares.

I bought some lotto (TWTR) tickets that I didn't expect to profit from, but if I did, I knew it could be really good. I bought the $68 puts for about 12 cents on average with about three hours to go before expiration. I covered some at a small gain during the dip abou half an hour before closing, but I wasn't able to get enough to offset the loss when I covered the rest at a nickel. Not my typical trade to be sure, but I'm actively working on it to make it one of my more active Friday moves.

(TWTR) P - 50

(CAMT) 11

(CSIQ) + 449

+ 379
 
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