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December 23, 2013

Portfolio Update - 12/21/13

Lots of action in the market this week. SPX hit all time highs, VIX is back under 14 and the taper is finally here. We're not going to try to predict where the market's going but we'd expect a grind higher and volumes to  dip as we enter Christmas/New Years last 2 weeks of the year.
Our position in GOOG expired worthless and we kept full credit. AMZN is a very bullish looking chart:
amznIt was a bit difficult getting a fill as one trade so breaking up into 2 credit spreads (370/400 bull put and 400/430 bear call spreads) helped. However, breaking up Iron Bfly into 2 credit spreads can hurt overall position if the underlying stock starts to move against us. Here's our current P/L:
risk profileWe're going to let this trade simmer and if AMZN starts to move fast we'll make adjustments accordingly. Next week we'll look to sell some put spreads in the names that show relative strength (FB,GOOG,NFLX some on our watch list).

December 19, 2013

$AMZN Weekly Trade - 12/19/13

  • Strategy: Iron Butterfly
  • Underlying: AMZN
  • Trade: SELL -1 IRON CONDOR AMZN 100 (Weeklys) JAN2 14 400/430/400/370 CALL/PUT @17.00 LMT
  • Trade Price: $17.00 credit per spread
  • Margin: $13.00 per spread
  • Return on Risk: 130%
  • DTE: 22
Risk Profile:
risk profile
Trade:
trade
This is a daily chart of AMZN:
chart
AMZN is coming up to retest 400 level. We're entering slightly bullish Iron Butterfly looking for a drift higher (not explosion). We are looking for 10% return on margin as our profit objective and we don't want to lose more than 15% of margin. Points of adjustments are 385 and 415 (price) and when we're down 50% of max allowable loss or $100 (P/L). We will adjust by rolling 'bad' side up or down 30 points. For example, AMZN goes to 385 we will roll 400/370 put spread down to 370/340 and same for the upside. Last few weeks of the year should be slow and that should help our trade reach Profit Objective.

October 8, 2013

$RUT Weekly Trade


  • Strategy: Put Butterfly
  • Underlying: RUT
  • Trade: BUY +1 BUTTERFLY RUT 100 OCT 13 1080/1060/1040 PUT @3.40 LMT
  • Trade Price: $3.40 debit per spread
  • Margin: $340 per spread
  • Profit Target: 15% of margin ($50 per spread)
  • DTE: 10
Risk Profile:

Trade:

NOTEThis is an advanced trade, anyone that isn't familiar with butterfly spreads should paper trade first before committing real capital.
We're putting on a slightly bearish put butterfly in Russell 2000 Index options with about 10 days until expiry. This is a step 1 of this trade. The way we're going to manage this trade is:
  • If RUT moves to 1080 we will add another put butterfly with 1070 put as short strike and wings will be 20 points away (same as original trade). Our profit target will be 15% of new margin requirement and our timeframe to exit will be within the next 7 days. This is our Risk Profile 7 days from today:


Notice, we can be wrong on direction and as long as RUT trades between 1027 and 1083 this trade should be in the green. 

September 26, 2013

$GLD Weekly Trade Idea

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  • Strategy: Bull Put Spread
  • Underlying: GLD
  • Trade: SELL -1 VERTICAL GLD 100 (Weeklys) OCT1 13 124/121 PUT @.21 LMT
  • Trade Price: .20¢ credit per spread
  • Margin: $2.80 per spread
  • Return on Risk: 7.14%
  • DTE: 9
Risk Profile:

Trade:

Gold has been in a steady downtrend since peaking out back in Oct'12. Last week the Fed decided to kick the TAPPER down the road and gold caught a bid running from 125 to 132, it has faded since and last two days it seems like buyers are stepping up. GLD is back above it's 8 day MA and below 21 day MA. We're going to use that 125 area as our pivot for this trade. The risk here is that Gold futures trade almost 24 hours around the clock and any news out of China or Europe can drive price one way or the other which will cause GLD to gap from previous close. A trader may consider reducing size to avoid risk, but as long as GLD stays above 123.80 ( GLD is 4.11% from break even) this trade should yield 7.14% ROR.

September 23, 2013

$GMCR Weekly Trade

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  • Strategy: Bull Put Spread
  • Underlying: GMCR
  • Trade: SELL -1 VERTICAL GMCR 100 (Weeklys) OCT2 13 70/65 PUT @.35 LMT
  • Trade Price: .35¢ credit per spread
  • Margin: $4.65 per spread
  • Return on Risk: 7.52%
  • DTE: 18
GMCR is down over 6% today and is currently under 50 day moving average. It has traded several times under 50d SMA and was able to find buyers. We're thinking this down move might be stretched and we should see buyers step in. To limit our downside we're going to use 74 level as potential stop, so risking about $50 to make $35 per spread.

September 18, 2013

$LNKD Weekly Trade

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  • Strategy: Bear Call spread
  • Underlying: LNKD
  • Trade: SELL -1 VERTICAL LNKD 100 (Weeklys) SEP4 13 265/270 CALL @.40 LMT
  • Trade Price: .40¢ credit per spread
  • Margin: $4.60 per spread
  • Return on Risk: 8.69%
  • DTE: 11
LNKD has been one strong stock running from 160 to recent highs of 255. We're looking for a H&S pattern to play out on a 30 min chart and measured move would put this stock around 238. We'd consider closing out this trade on the break above recent high (257.50)

September 13, 2013

$AAPL Weekly Trade

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  • Strategy: Bull Put Spread
  • Underlying: AAPL
  • Trade: SELL -1 VERTICAL AAPL 100 (Weeklys) SEP4 13 440/435 PUT @.45 LMT
  • Trade Price: .45¢ credit per spread
  • Margin: $4.55 per spread
  • Return on Risk: 9.89%
  • DTE: 14
Risk Profile:
Screen Shot 2013-09-13 at 10.43.42 AM
Trade:
Screen Shot 2013-09-13 at 10.43.03 AM
After a disappointing product release earlier this week Apple is down to around 467. It is still above it's 50, 100 and 200 day moving averages. We think there will be some support around 450-460 level. We're selling put premium with 14 days until expiration. Any bounce in Apple will crush put premiums and that will help our trade to work a bit faster. Daily chart:
Screen Shot 2013-09-13 at 10.44.01 AM

September 12, 2013

$GOOG Weekly Trade

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  • Strategy: Bear Call spread
  • Underlying: GOOG
  • Trade: SELL -2 VERTICAL GOOG 100 (Weeklys) SEP4 13 935/940 CALL @.32 LMT
  • Trade Price: .30¢ credit per spread
  • Margin: $4.70 per spread
  • Return on Risk: 6.64%
  • Probability: 84.02%
Risk Profile:
Screen Shot 2013-09-12 at 10.43.25 AM
Trade:
Screen Shot 2013-09-12 at 10.43.09 AM

August 27, 2013

$RUT Weekly Trade


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Traders,
Russell 2000 Index is trading around 1043. We are looking for a bit of sideways trading over the next few days heading into Labor Day weekend. We are going to sell 1040 put and 1050 call that expire this week (Aug 30) and buy 1040 put and 1050 call that expire next week (Sep 6).
Trade: BUY +1 DBL DIAG RUT 100 (Weeklys) SEP1 13/AUG5 13 1050/1040/1050/1040 CALL/PUT/CALL/PUT @8.90 LMT
Margin: $890 per spread
Profit Target: $130 per spread (15% of margin)
Stop: $175 per spread (20% of margin)
Duration: 2-3 days
Risk Profile:

Trade:


This trade was closed for 1.63% gain in 2 weeks.

August 19, 2013

$RUT Weekly Trade


Traders,
Russell 2000 Index is trading around 1021. We are looking for a bit of sideways trading over the next few days after coming off of recent highs. We are going to sell 1020 put and 1030 call that expire this week (Aug 23) and buy 1020 put and 1030 call that expire next week (Aug 30).
Trade: BUY +1 DBL DIAG RUT 100 (Weeklys) AUG5 13/AUG4 13 1030/1020/1030/1020 CALL/PUT/CALL/PUT @8.50 LMT
Margin: $850 per spread
Profit Target: $127 per spread (15% of margin)
Stop: $170 per spread (20% of margin)
Duration: 1-2 days

Update 8/21/13

This trade was closed for 13% gain

August 5, 2013

$RUT Weekly Trade


Traders,
Russell 2000 Index is trading around 1060. We are looking to sell 1060 put that expires this week (Aug2) and buy a 1060 put that expires next week (Aug). This makes it a calendar spread that benefits from a rise in volatility (IV) and passage of time (Theta). This trade is made up of weekly/monthly options which make it a very risky trade, so manage risk accordingly.
Trade: BUY +1 CALENDAR RUT 100 AUG 13/AUG2 13 1060 PUT @4.15 LMT
Margin: $415 per spread
Profit Target: $65 per spread (15% of margin)
Stop: $85 per spread (20% of margin)
Duration: 2-3 days
Risk Profile:

Trade:


July 31, 2013

$RUT Weekly Trade


Traders,
Russell 2000 Index is trading around 1050 and it looks like it might try to retest recent highs of 1056. Today we have FED meeting that can potentially move the market, so manage your size of trade accordingly. We are going to sell 1040 put and 1050 call that expire this week and buy 1040 put and 1050 call that expire next week, that makes it a double calendar. We are entering this trade for a debit and will look to make about 15% of margin (debit). Our stop will be around 20% loss of margin (debit). We will look to close out this trade before the close of trading tomorrow.
Trade: BUY +1 DBL DIAG RUT 100 (Weeklys) AUG2 13/AUG1 13 1050/1040/1050/1040 CALL/PUT/CALL/PUT @8.30 LMT
Margin: $830 per spread
Profit Target: $125 per spread (15% of margin)
Stop: $165 per spread (20% of margin)
Duration: 1-2 days


8/1/13 Update: This trade is closed for 7.23% loss.

July 22, 2013

$RUT Weekly Trade

Traders,

Russell 2000 Index is trading around 1053. We are up over 100 handles in 6/24 bottom with little to no pullbacks. Clearly the trend is still up, but a pause or a little back and fill would be healthy here. We are going to sell options that expire this week and buy options that expire next week (same strike, same quantity). We are selling this week's 1050 Put and 1060 Call and buying next week's 1050 Put and 1060 Call. This trade benefits from increase in implied volatility and passage of time (THETA). Best case scenario is RUT trades sideways over the next few days and we'll get out at our profit target. If RUT makes a big move in either direction we will have our risk management (STOPS) working.

Trade: BUY +1 DBL DIAG RUT 100 (Weeklys) AUG1 13/JUL4 13 1060/1050/1060/1050 CALL/PUT/CALL/PUT @8.60 LMT
Margin: $860 per spread
Profit Target: $130 per spread (15% of margin)
Stop: $170 per spread (20% of margin)
Duration: 2-3 days


7/25/13 Update: 
This trade is closed for 12.79% gain in 2 days.

July 16, 2013

Weekly Trade update 7/16/13


Traders,
Yesterday we entered RUT JUL4 13/JUL 13 1040 Put Calendar, average cost 4.20 per spread. After a small pull back in the markets today, this trade shows unrealized gain of 9.52%


Our profit target for this trade is 15%. Does this mean we should not take some profits on the way there and reduce risk? NO!! Anyone that wants to successfully manage risk should take profits when they're there. For example, this trade shows a closing price of 4.60 as of today's close. If we can take 1/2 position off for 4.60 debit (+.40¢) and take the other 1/2 position off for 4.80 (+.60) that's a total average gain of .50¢ (per contract) which is about 11.90% return on risk. The point is, don't let winners turn into losers, take profits along the way, and while you may not hit your profit target every single time, reducing risk will keep you in this game alot longer. 
We have orders to close a part of this trade at 4.50 and we were not filled. We will try again tomorrow and we should be completely out by Thursday.
Make sure to follow us on Twitter for entries, exits and/or updates.

July 15, 2013

$RUT Weekly Trade


  • Strategy: Calendar spread
  • Underlying: RUT
  • Trade: BUY +1 CALENDAR RUT 100 (Weeklys) JUL4 13/JUL 13 1040 PUT @4.25 LMT
  • Trade Price: 4.30 debit per spread
  • Margin: $430 per spread
Trade:

Risk Profile:

We are selling 1040 PUT that expires this week (Jul monthly) and buying 1040 PUT that expires next week (Jul4). Options that expire closer in time will decay faster than those that expire further out in time, so we're taking advantage of time decay here. Our goal would be to get out by Thursday with about 15% (of margin) profit or$65, and we don't want to lose more than 20% (of margin) on this trade or $85.

July 10, 2013

$RUT Weekly Trade


  • Strategy: Calendar spread
  • Underlying: RUT
  • Trade: BUY +1 CALENDAR RUT 100 JUL 13/JUL2 13 1010 PUT @4.10 LMT
  • Trade Price: 4.10 debit per spread
  • Margin: $410 per spread
Trade:

We are selling 1010 PUT that expires this week (Jul12) and buying 1010 PUT that expires next week (Jul20 - monthly). Options that expire closer in time will decay faster than those that expire further out in time, so we're taking advantage of time decay here. Our goal would be to get out by Thursday with about 20% (of margin) profit or$80, and we don't want to lose more than 25% (of margin) on this trade or $100.

7/10/13 Update: This trade is closed for 7.31% gain.

July 4, 2013

Weekly Trade update 7/4/13


Traders,
Last week's traded yielded a small gain after we converted our RUT 970 put calendar into 970/980 put diagonal. We did not enter a new trade because with July 4th holiday and Friday's Non Farm Payroll numbers that's due out in the morning. However, we will look to enter a new trade either Friday or early next week. We are going to keep an eye on RUT daily chart as we might be coming into some levels of resistance:

At the money (ATM) put calendar will be our weapon of choice and any spike in volatility should help to make this trade quick and profitable.
Make sure to follow us on Twitter for entries, exits and/or updates.

June 27, 2013

$RUT Weekly Trade


  • Strategy: Calendar spread
  • Underlying: RUT
  • Trade: BUY +1 CALENDAR RUT 100 (Weeklys) JUL2 13/JUL1 13 970 PUT @4.10 LMT
  • Trade Price: 4.10 debit per spread
  • Margin: $410 per spread
Risk Profile:
Screen Shot 2013-06-27 at 9.59.55 AM
Trade:
Screen Shot 2013-06-27 at 10.00.08 AM
We are selling 970 PUT that expires next week (Jul5) and buying 970 PUT that expires the week after(Jul12). Options that expire closer in time will decay faster than those that expire further out in time, so we're taking advantage of time decay here. Assuming RUT doesn't move 20 points in either direction by Monday of next week, this is what this trade's risk profile should look like:
Screen Shot 2013-06-27 at 10.08.29 AM
Our goal would be to get out by Monday with about 20% (of margin) profit or$80, and we don't want to lose more than 25% (of margin) on this trade or $100.

June 20, 2013

$RUT Weekly Trade


  • Strategy: Calendar spread
  • Underlying: RUT
  • Trade: BUY +1 CALENDAR RUT 100 (Weeklys) JUL1 13/JUN4 13 970 CALL @3.20 LMT
  • Trade Price: 3.20 debit per spread
  • Margin: $320 per spread
Risk Profile:

Trade:

We are selling 970 call that expires next week (Jun4) and buying 970 call that expires the week after(Jul1). Options that expire closer in time will decay faster than those that expire further out in time, so we're taking advantage of time decay here. Assuming RUT doesn't move 20 points in either direction by Monday of next week, this is what this trade's risk profile should look like:

Our goal would be to get out by Monday with about 20% (of margin) profit or$65, and we don't want to lose more than 25% (of margin) on this trade or $80.

June 11, 2013

$SPX Weekly Trade


June 11, 2013
  • Strategy: Bull Put spread
  • Underlying: SPX
  • Trade: SELL TO OPEN VERTICAL SPX 100 (Weeklys) JUN2 13 1585/1580 PUT @.30 LMT
  • Trade Price: .30¢ credit per spread
  • Margin: $4.70 per spread
  • Return on Risk: 6.38%
Risk Profile:
Screen Shot 2013-06-11 at 10.20.29 AM

May 8, 2013

$GMCR Weekly Trade


May 8, 2013
  • Strategy: Iron Condor
  • Underlying: GMCR
  • Trade: SELL IRON CONDOR GMCR 100 (Weeklys) MAY2 13 72.5/75/47.5/45 CALL/PUT @.30 LMT
  • Trade Price: .30¢ credit per spread
  • Margin: $2.20 per spread
  • Return on Risk: 13.63%
Risk Profile:
Screen Shot 2013-05-08 at 3.33.44 PM
Trade:
Screen Shot 2013-05-08 at 3.33.18 PM

April 23, 2013

$AAPL Weekly Trade


Apr 23, 2013
  • Strategy: Iron Condor
  • Underlying: AAPL
  • Trade: Sell Apr-26-13 345/350/460/465 Iron Condor @ .45 Limit
  • Trade Price: .45¢ credit per spread
  • Margin: $4.55 per spread
  • Return on Risk: 9.89%
Risk Profile:
Screen Shot 2013-04-23 at 10.26.18 AM
Trade:
Screen Shot 2013-04-23 at 12.07.11 PM

March 26, 2013

$V Weekly Trade


Mar. 26, 2013
  • Strategy: Bull Put spread
  • Underlying: V
  • Trade: Sell to Open Mar'28 165 Put; Buy to Open Mar'28 160 Put
  • Trade Price: .40¢ credit per spread
  • Margin: $4.60 per spread
  • Return on Risk: 8.69%
Risk Profile:
risk profile
Trade:
order

February 27, 2013

$SPX Weekly Trade


Feb 27, 2013
  • Strategy: Bear Call spread
  • Underlying: SPX
  • Trade: Sell to Open Mar1 1535 call; Buy to Open Mar1 1540 call
  • Trade Price: .30¢ credit per spread
  • Margin: $4.70 per spread
  • Return on Risk: 6.38%
Risk Profile:
spx weekly risk profile
Trade:
spx weekly order

February 14, 2013

$SPXPM Weekly Trade


Feb 14, 2013
  • Strategy: Bear Call spread
  • Underlying: SPXPM
  • Trade: Sell to Open Feb'13 1530 call; Buy to Open Feb'13 1545 call
  • Trade Price: .40¢ credit per spread
  • Margin: $4.60 per spread
  • Return on Risk: 8.69%
Risk Profile:
spxpm risk profile
Trade:
spxpm order

January 31, 2013

$SPX Weekly Trade


Jan 31, 2013
  • Strategy: Bear Call spread
  • Underlying: SPX
  • Trade: Sell to Open Jan5 13 1515 call; Buy to Open Jan5 13 1520 call
  • Trade Price: .40¢ credit per spread
  • Margin: $4.60 per spread
  • Return on Risk: 8.69%
Risk Profile:
spx weekly risk profile
Trade:
spx weekly order

January 24, 2013

$FFIV Weekly Trade


Jan 24, 2013
  • Strategy: Bear Put Butterfly
  • Underlying: FFIV
  • Trade: Buy to Open 1 Jan5 95 put; Sell to Open 2 Jan2 100 puts; Buy to Open 1 Jan5 105 put
  • Trade Price: $1.60 debit per spread
  • Margin: $160 per spread
  • Profit target: 20% return on margin ($32)
Risk Profile:

Trade:


January 17, 2013

$SPX Weekly Trade


Jan 17, 2013
  • Strategy: Iron Condor
  • Underlying: SPX
  • Trade: Sell to Open Jan'13 1465 put; Buy to Open Jan2 13 1460 put; Sell to Open Jan'13 1490 call; Buy to Open Jan'13 1495 call
  • Trade Price: .40¢ credit per spread
  • Margin: $4.60 per spread
  • Return on Risk: 8.69%
Risk Profile:

Order:

January 14, 2013

$LULU Jan/Feb Double Calendar spread


Jan 14, 2013
  • Strategy: Jan/Feb 65/75 Double Calendar spread
  • Underlying: LULU (Lululemon Athletica Inc - NDAQ)
  • Trade: Sell to Open Jan'13 65 Put; Buy to Open Feb'13 65 Put; Sell To Open Jan'13 75 Call; Buy to Open Feb'13 75 Call;
  • Trade price: $2.05 debit
  • Margin: $2.05 per spread
  • Profit target: 10%-20% of margin (.20¢-40¢)
Risk Profile:

Trade Duration: Jan'13 options expire on Friday (1/18/13). Best case scenario for this trade is LULU trades either at 65 or 75 by Jan expiration. We are selling front month options and buying back month options to take advantage of Theta or time decay. Our long options will decay at a slower pace and any increase in volatility should help this trade reach our profit target sooner. We will constantly monitor this trade to determine if/when adjustments need to be made.

January 10, 2013

$V Weekly Trade


Jan 10, 2013
  • Strategy: Jan/Feb 160 Call Calendar spread
  • Underlying: V (Visa - NYSE)
  • Trade: Sell to Open Jan'13 160 Call; Buy to Open Feb'13 160 Call
  • Trade price: $2.40 debit
  • Margin: $2.40 per spread
  • Profit target: 10%-20% of margin (.25¢-50¢)

Risk Profile:

Trade Duration: Jan'13 options expire next Friday (1/18/13). Best case scenario for this trade is Visa trades around 160 by Jan expiration. We are selling front month options and buying back month options to take advantage of Theta or time decay. Our long options will decay at a slower pace and any increase in volatility should help this trade reach our profit target sooner. We will constantly monitor this trade to determine if/when adjustments need to be made. 
Update 1/12/12:
On 1/11/13 we closed this position by selling this calendar spread for $2.65 (+.28¢ or 11.81% Return)