The market has been torn up lately. Nearly straight down for 75 S&P points. I used this bounce to adjust some positions, even if they were slight losses. The adjustments made helped me move slightly delta negative and remove some risk.
I plan on heading down to Denver this afternoon to get a haircut, Sam's Club run, visit a few friends, and watch the Laker/Celtics game. I will probably make it a shorter trading day. But before I leave, here are some trading details.
2 hrs into the market opening the portfolio is up about 1%. I would like to continue to add some downside positive Theta exposure. Perhaps SPY 134 calendars.
Hedge Funds, trading is easy. Anyone can do it.
Trades: (and remember, I am a ski instructor. To follow my trades, can lead to financial ruin. I am not a hedge fund, and these trades are for education purposes only).
AEE - Sold 2 units of Sept 40p for .90. This has been a slow downward trade which did not move in the way I had hoped. Yesterday was my time stop, and as per the plan I exited. A small .15 profit.
MFE - added 1 unit of July/Sept 35p for 1.17. I wanted to add some exposure on this issue. I plan on putting more on if I can get better prices.
IGT - Exited all of my 35p calendar position for .78-.85. I totally screwed this trade up. I should have been out at 1.00. Since is was an extremely small position I delayed the exit. Just not smart on my part.
IWM - Sold 1 unit of July/Aug 76c for .76. I lost .05 on this leg. I think I will be able to buy the 75c spread for less if we get a significant drop in the market. I just don't want to ride this down. I made this move with IWM @ 73.04. *** While I was gone, I was filled on a few bullish plays during the afternoon selloff. I was filled right on the lows. Good on me. IWM 75c June08/Aug for 1.20, and IWM 73c June08/Aug for .87. These were purchased with IWM @ 71.75.
My Portfolio ended up nicely on the day. Up .8%
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This is what my friends hear when I talk about the market. Can you relate?
FRIDAY - Today I was wacked. KO hurt alot. The chart has been finding lower highs and lower lows, yet on Wednesday Deutche Bank gave it a buy. Fundamentally, I figured it would be a consumer staple in a tough economy, and therefore a stable stock. I was wrong. The Italian arm of Coca-Cola warned and the trade absolutely fell apart.
Front month Volatility spike as the stock plummeted from 57-54. I was down big on the trade. the 60p spread was marking at .05, the 57.5 was at .10, and 55p was at .20. All of which I bought for around .30. This was about my biggest position of the year (I screwed the entry plan), and it went against me. I was on my knees on for about 1 hr. It just sucked. I have learned from previous trades, that once the initial shock to the options subsides, one can find a better exit price with a bit of patience. It happened to me last year with BBBY and I puked them at .10 from .27. Within a few hours the trade opened back up to .25, yet I was out.
But once the spread came back into line, I wasn't shy about exiting half my position for a loss.
KO - Exited 2 units of 57.5p July/Aug for .25 and .30. I am looking to unwind the rest of this early in the week. Bummer though...
UST - Exited half of my June/July 55c for .95. That trade was a thing of beauty. I was attempting to exit this trade all day long with the underlying around 55. Nothing until the last hour of the day. I still will ride a few of the final spreads on over the weekend to benefit from time decay. I am holding very tight breakeven stops.
SPY - Exited 1 138/140/142 butterfly for .29. I bought this as protection to the upside last week. I have build my IWM neutral/bullish position this week, so I was able to exit 1 of 2 butterflies with only a .03 loss.
KO took so much mental capital today, I found it difficult to add more positions to the portolios.
I am still 79% in cash, yet short term bullish.
SPX weighted
Delta +7
Gamma -1.4
Theta 160
Vega +620
I have really pulled my horns in. I was dead right on my call last week. DEAD RIGHT, yet I am only up 2% on the week... hmmm.
My call from last sunday night
This chart is very interesting. As I look it over, this is my thought:
1) Hitting the 50% retracement (SPY 135.2) is a foregone conclusion. And I believe the 133 level is a very high probability happening too.2) We have been having alternate weeks of strength and weakness. I think we have a scary tuesday and wednesday, and by week's end the market moves back up at a higher level than where tuesday closes.
3) Within a few weeks (perhaps July 4th ($150 oil spike forecast)), seek the primary uptrend line. Won't that be a thill...
