Options

[barn32]

Added 1 trade:

CBI, b, 2, july 21, 15, p, 1.04, 1.59

I missed the big move in CBI becaue of a FFM, which cost me $300, plus what I would have made so let's say a $500 error. (I bought calls instead of puts.)

Rolled two winners into vertical spreads. JD and CENX were both up good today, so I sold farther out of the money calls to offset the risk and potentially add to the gains.

Sometimes, if a stock is up enough, a farther out of the money call (or put) will be more expensive than the one you originally bought. In that case, you can sell that option for more than you paid for the original option purchased and lock in a gain--thereby turning the trade into a spread. The farther out of the money option doesn't have to be more expensive for you to create a spread, however. In that case you have just reduced your loss.

I also had a good reverse earnings play in DVMT, turning a $200 loser into a $100 winner.

As you can see from the screenshot my hedge in CENX didn't work out too well. It cost me quite a lot. That -$335 is overinflated I believe, but it's not over yet. Obviously, in hindsight, I should have waited or just liquidated the position for a $556 gain...all of that gain came in today, by the way, with the stock only up ~$2.00.

CENX also closed at the high of the day on strong volume, so if it continues to rise I really may be kicking myself. (2nd screenshot.)

A few points move in a stock can really make these options swing...up or down.

And just for the record a big part of this experiment for me is the outright buying of options (puts and calls.) Something I have never done before. I've done spreads and sold lots of options both covered and naked, but until I started this thread I had never before purchased a single option.

I can see now there is value in this strategy if you do your homework and keep things under control.

Appx. 69 positions

31 winners

38 losers

Good day over all, +~$900.

[barn32]

I've been short SNAP for a little while now, patiently waiting. I was going to buy more puts today, (should have done it yesterday, sigh), but it's already made a big move down. Watching it closely for a place to get in again. And, if this article is true, then it should be headed even lower.

I looked at the open interest across four or five months and there is indeed a lot of put buying in SNAP going all the way out to JAN of 2018.

With options your risk is limited, so if you decide it's worth a $300 risk then that's all you lose. If the stock goes down 10 or 20% that's all you make shorting the stock. But you could make 25, 50, 100, 200% or more buying options.

It works in both directions, but in the case of shorting a stock you don't have to worry about the downtick rule, nor do you have to be concerned about there not being enough shares available to borrow, which can make it difficult to get filled.

[barn32]

As I write this the DOW is up over 100 points yet my account is down a few bucks. Why? I think it's due to over-hedging.

Here's a screenshot of an over-hedge. Had I just left well enough alone I'd be up ~$800 in this trade, but as it stands I'm only up $300.

Rolling into spreads works sometimes and sometimes it doesn't. If the stock heads south, in the case of calls, or up a small amount, it works, but if the stock heads a lot higher you lose profit.

Since I trade in even numbered pairs I'll probably look at just selling off half the position on a good run and letting the rest ride. That way, if it falls back to the purchase price I can still exit with a profit.

It looks like I did sell off half of ALGN, but then instead of letting the second half ride I hedged it off.

[barn32]

Bad day, down $800. Mostly in two stocks.

SHOP was +$2.00 and then when the flash crash hit it was down $9.00! That's an $11.00 swing. Not fun. It's down $6.50 now.

I was hedged for a couple hundred of that, but that's it. That was my biggest problem.

I closed out about 17 trades, mostly winners and spreads, because they didn't have much life in them anyway.

54 total open

23 winners

31 losers

Cashed for $2600 (thumbnail)

Current positions down $2400.

[barn32]

I'm starting to lose track. So far I've made 87 opening trades. I've added half a dozen more, but I'm not including them in this little adventure. When these current postions expire I'll end this thread.

I'm the only one who gives a shit, and I only did this to keep myself honest.

I closed out about 5 today.

There's something like 52 still open.

8 are spreads

17 winning

35 losing

12 expire Friday, only 1 winner

-$100 overall.

[oughtoh]

I, for one, have enjoyed reading your posts.

[Tape Reader]

Originally Posted by oughtoh

I, for one, have enjoyed reading your posts.

Me too.

[barn32]

OK, two more that I just put on about 45 minutes ago, and one yesterday.

I only bought 50 shares of MSCI, because I thought it might pull back and I could buy 50, or 150 more cheaper. Instead it got away from me after it filled the 50 lot and the two options. I have high hopes for these two.

The third one is Citybank (C). I bought some calls that expire Friday in the hopes that the Fed raises interest rates (98% chance?) and that these could double, triple or quadruple by then.

[_______]

Originally Posted by barn32

OK, two more that I just put on about 45 minutes ago, and one yesterday.

I only bought 50 shares of MSCI, because I thought it might pull back and I could buy 50, or 150 more cheaper. Instead it got away from me after it filled the 50 lot and the two options. I have high hopes for these two.

The third one is Citybank (C). I bought some calls that expire Friday in the hopes that the Fed raises interest rates (98% chance?) and that these could double, triple or quadruple by then.

I'm not sure Citi or other large banks will react as you project. At least if history is any guide.

https://seekingalpha.com/article/408...oved-fed-hikes

Good luck on all of your options. I didn't know this about treasury yields or bank stocks following fed rate hikes. It does seem counterintuitive.

I was going to comment that C was less a pure play on interest rates than BAC would be.

Hopefully it all works out for you.

[barn32]

What a horribly depressing day when you have to close out a bunch of losers for pennies on the dollar.

[barn32]

Originally Posted by _______

I'm not sure Citi or other large banks will react as you project. At least if history is any guide.

https://seekingalpha.com/article/408...oved-fed-hikes

Good luck on all of your options. I didn't know this about treasury yields or bank stocks following fed rate hikes. It does seem counterintuitive.

I was going to comment that C was less a pure play on interest rates than BAC would be.

Hopefully it all works out for you.

Looks like you were right. I bought them for 8¢ and sold them for 3¢, a $53 loss.

In retrospect, that could have been a mistake. For $80 lousy dollars I could have just held them until Friday and maybe these stocks would jump.

Goldman Sachs (GS) came back pretty good.

[barn32]

GS (which I've owned for a while now) and C are coming back, so I just bought 2 of the july, 21, 65 calls in C for $1.48.

I have more time and we'll see what happens.

If it ends up being a mistake, I'll just put it in the pile.

[barn32]

97 trades made

Closed out 12 trades, 9 were losers

49 open trades

15 winners

34 losers

Down about $400

Morning of the flash crash I was up $1200.

I'm actually amazed I'm only down $400 with so many losing trades.

I have made so many mistakes. (Not counting the ~$1000 in FFMs)

I'm not taking profits soon enough. Since I buy in even numbered pairs I need to sell off half when I make a quick hit. That way if it falls back to the purchase price I can close it out and still show a profit. I missed quite a few of those opportunities. Being greedy I guess.

Took on too many trades, obviously. Now I'm much more selective.

There are other errors too numerous to mention.

I'm beginning to feel like an old option. My time is getting short. I'm starting to fade. I'm slowly losing value. And I will soon expire...worthless.

[barn32]

It just shows you that you should never give up. I was long 2 of the 70 DG (Dollar General) puts for around $2.15 apiece. The stock was at 75 and they expire today.

So I was going to lose the max of about $430. I wake up a little late and I'm only down $30. Stock had gone down five or six points! By the time I could get filled and out at $1.35 I lost $162. Turns out at one point just after the open I could have got out + $200!

[Note to self: don't sleep in]

*DG came all the way back to 70 and the puts are now worthless, so at least I saved about $300. It turns out that DG was part of the AMZN purchase of WFM (Whole Foods), and all of those type of retailers got hit. Kroger, Wal-Mart, etc.

I'm including all of my options trades, day trades, scalps, etc., even the ones I haven't posted otherwise this whole shebang is getting too unweildly.

Over the last three days I closed out ~27 positions, some of which expired worthless.

104 total trades made

51 open trades
19 winners
32 losers

Cashed for $2684
Open positions down -$2600

[barn32]

I just put on earnings trades for seven different stocks that all report this week.

All but the ORCL 48/50 spread, which I've had on for almost two months now are "one for one," or "in-out" spreads. With the underlying at say, 100, you would buy the 99 put and sell the 101 put (one in the money, and one out of the money) trying to get as close (or over) a $1.00 credit as possible. You are risking $1.00 to make $1.00, more or less.

Some of these I had to "fudge" slightly to get the $1.00 credit.

You can do these with puts or calls. With puts you get a credit and with calls you have a debit.

All of these except Adobe are put spreads.

In LEN I couldn't construct a decent spread, so I bought JULY calls instead.

I have seven spreads and two outright call positions.