March 26th – Making some adjustments with high prob trades

Several indicators are turning short term bullish.


End of quarter mark ups end on Thursday mornings. Oh that crazy mutual fund game. The technicals still bearish, but there are other reasons to consider buying. At this point I am still looking for reasons to sell. DSX looks interesting, and I am loving the COF short. I am looking at the 50day and 20 day MA as a place to unload half my position.
As of 8:40 am I sit on 820 negative deltas. I would like to gain some long exposure, but still keep my overall position delta negative.
I have looked to gain some long exposure with Volatility and Time Decay on my side. I have chosen to enter:
WDC – Sell Apr 25/30c at 1.50, 1.59, 1.70, 1.74 credit @ 29.73, 29.42, 29.06, and 29.03. There was a large bottoming tail hammer two days ago, and it caught my attention. The latest move created a W4 buy with a price target of 38 by August.
This thing CRASHED on huge volume. 3 million shares in 20 minutes. After it’s drop, it rallied hard up to 29. At 1pm I covered 2 units for 1.45 on a quick rally.
OIH – buy Apr/May 170p for 2.95 and 2.92 @ 176 and 176.15. Currently this offers a 3% volatility Skew, and breakevens of 160 and 181.5. Very nice! And it offers a 1.5:1 reward to risk. I like that too.
POZN – Bought 1 unit of Apr/May 10p for .19 with underlying @ 10.42 and front month option @ 1.80. I used this to hedge my Apr/Jun 12.5p
MFE – Bought May/Jun 35p for .45. Breakevens @ 31.80 and 39.20. There is a 4% volatility skew on the spread.
COF – Sold 3 units on a trend brake. Sold for 2.65 and 2.70 @ 52.20.
At 1pm the market went Crazy. It rallied up and I did some quick covering. I did want to lock up some profits in my directional trades. COF and WDC
It was actually a crazy day for me. Up 1.3% when all closed. I put a few nice trades on, although small. I wasn’t able to get much in size at my prices today. At the close I had 63 working orders and 16 filled orders.

Leave a Reply

Your email address will not be published.