Whew what a day. We are teetering on the edge right now. Does the market tank and resume it’s downtrend. Have we found stability? Will be be trading Red Paper clips instead of going to banks for loans?
I am not sitting around to find out.
I am still getting pounded in KO, however it looks like it has reached a previous low consolidation @ $53. It is my only hurting position. I am play very smartly with other positions. Most positions are small and agile.
No relation to trading, but it was a song I learned note for note about 15 yrs ago.
It seems to be that many many people are forecasting doom and gloom. TOO many people. they seem to be well protected with puts. We have been flirting with lower, but cannot seem to break through. It doesn’t seem like the right time for a big down move, however I have hedged lightly to the downside with some SPY 131 calendars.
Basically I am playing SPY to the downside, because it is a weak index, and IWM to the upside because it a relatively strong index.
Today was interesting. Early morning Citibank, C, announced more crap on their balance sheet. This sent the banks lower. It was a good opportunity to look for Volatility skews in a few other issues.
USB – I bought July/Sept 30p for .65 on tuesday, and sold some for .80 yesterday. Today the opportunity presented itself again today. I bought twice the number 4 units this morning, and sold 1/2 between .75 and .95. The Breakevens are excellent on this trade. 26/34.50, although I think when Volatility settles down, this will come in a bit. But for a two month spread, I really like it, and I will buy more if I get the chance.
ACN – exited 1 unit of July/Aug 40p for .40. A small profit, but I didn’t want to have it on.
C- 2 units of July/Sept for .63 and .62 with the underlying @ 19.52. This is my way of being slightly bullish on the banks… ha. The breakevens are 17.8 and 23. The trade is small, but I like the 2 month spread for a very inexpensive price,and time to be right. I tried to by a few for .61 and .60, but no luck.
IWM – bought 1 unit of 75c July/Aug calendar. Bullish
SPY – bought 1 unit in 3 accts of JunQuarterly/Aug 131p for 2.35-2.40. I bought this right against R1 resistance @ SPY 134.9
JRCC – speculative. JRCC Jun 50/55/60p butterfly for 1.20. Underlying 57.80. Volatility was huge, even for this stock. 140% Implied Volatility with 1 day to go. You gotta love volatility. The max reward to risk is 5 : 1.2 . I am good with this. I have a feeling this will be sold off a little more before it resumes it’s uptrend. That said, I just have to be right for 24 hrs.
APOL – sold 1 unit of July/Aug 50p for .80. I will look to buy it back @ .65 to .70. There is lots of extrinsic premium in the July. with a nice 8% vol skew.
Today was the best I have traded in awhile. Not just because I made money, but that everything had a plan, which fit into the bigger portfolio plan.
I was up 1% on the day, which has been a nice change, as the past 3 days have been a losers for a total of 6%.
Portfolio Greeks (SPX weighted)
Delta -7
Gamma -1.35
Theta 160
Vega 630
78% in Cash, I plan on continuing to build a number of small positions which grow the portfolio at 10-15% per month.