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Tuesday, April 26, 2016

Costco (COST) May Put Options

Friday, 4/22/2016 (11:33:10 am, PT)

sell -4 May 2016  $144 puts at $1.13

Why did I place this trade?
  • stochastics in oversold region
  • 75% probability of success

Tuesday, 4/26/2016 (8:26:57 am, PT)

buy back all puts at $0.50

Why did I place this trade?
  • I've collected more than 50% of the max in just 3 trading days
  • take profits!

PROFIT:  $252


SUCCESS!


Friday, April 22, 2016

Visa (V) April earnings play

4/21/2016 (12:50:48 pm, PT)

sell -3 April 22, 2016  $78 puts at $0.36

Why did I place this trade?
  • Visa was reporting earnings after the close on 4/21
  • implied volatility was relatively high
  • I was more bullish than bearish
  • 80% probability of success
  • expected move =  plus/minus $2.63

4/22/2016 (6:39:05 am, PT)  [expiration]

buy back all 3 puts at $0.05

PROFIT:  $93 (ONE day!)

 
SUCCESS!

Comments:
  • I was REALLY lucky that the market makers let me buy back my short puts at $0.05 because that was lower than the "mid" price.  Thank you, market makers!
  • I'm REALLY happy that I closed my trade at $0.05 because exactly one hour later Visa dropped to $77.28.
  • Notice that I made money even though I was wrong "directionally."  This is due to post-earnings "volatility crush."

Thursday, April 21, 2016

Netflix (NFLX) post-earnings play

4/19/2016 (9:55:01 am, PT)

sell -2 April 22, 2016  $99.50 calls at $0.71

Why did I place this trade?
  • earnings were released on 4/18
  • stock dropped on 4/19
  • I was bearish (short-term) on NFLX
  • 76% probability of success

4/21/2016 (12:58:51 pm, PT)

buy back calls at $0.05

PROFIT:  $132 (in 3 days)

Comments:
The high implied volatility of NFLX kept this call premium at $0.11 most of the day even though the stock was over $4.00 OTM with just 1 day remaining until expiration. 
The call premium finally dropped to 5 cents with just 1 minute left in the trading session.


SUCCESS!


Gold (GLD) Call Options

4/13/2016 (6:46:15 am, PT)

sell -10 April 22, 2016 (wk 4)  $122 calls at $0.45

Why did I place this trade?
  • stochastics in overbought region
  • 78.50% probability of success

4/14/2016 (7:52:14 am, PT)

buy back calls at $0.16

PROFIT:  $290 (in ONE day!)

SUCCESS!


Spiders (SPY) Call Options

4/14/2016 (9:44:14 am, PT)

sell -10 May 2016  $213 calls at $0.95

Why did I place this trade?
  • stochastics in overbought region
  • 77% probability of success

4/15/2016 (11:14:15 am, PT)

buy back all 10 puts at $0.71

PROFIT:  $240 (in ONE day!)


SUCCESS!


Whole Foods (WFM) Put Options

4/7/2016 (9:48:08 am, PT)

sell -4 April 29, 2016 (wk 5)  $29.50 puts at $0.39

Why did I place this trade?
  • stochastics in oversold region
  • 69% probability of success

4/18/2016 (7:48:17 am, PT)

buy to close puts at $0.14

PROFIT:  $100

SUCCESS!



Celgene (CELG) Call Options

4/14/2016 (10:52:10 am, PT) (FP)

sell -2 April 22, 2016 (wk 4)  $111 calls at $0.43

Why did I place this trade?

  • stochastics in overbought region
  • 83.50% probability of success
  • CELG does not pay dividends (important when selling calls)


4/21/2016 (6:36:05 am, PT) 

buy to close calls at $0.05

PROFIT:  $76.00


SUCCESS!




COMMENTS:

Even though there's only one day left until expiration, it's always a good idea to buy back your short options at $0.05 (or less) to remove the risk.

It's a good thing I did that on 4/21 because exactly two hours later CELG jumped to $109.82.  And who knows what will happen the next day, right?

Tuesday, April 19, 2016

Spiders (SPY) Bull Put Spread

3/31/2016 (10:31:47 am, PT)  (FP)

sell -4 May 2016  $200 puts at $2.15 
buy +4 May 2016  $190 puts at $0.83

Net credit:  $1.32 x 4 x 100 =  $528


4/19/2016 (11:03:14 am, PT)

buy to close the $200 puts at $0.74
sell to close the $190 puts at $0.23

Net debit:  $0.51 x 4 x 100 = $204

PROFIT:  $324
Return on capital:  8% (in 19 days)

SUCCESS!


Tuesday, April 12, 2016

Gold ETF (GLD) May Put Options

Wed. 4/6/2016 (10:04:01 am, PT)

sold -2 May 2016  $115 puts at $1.83 (credit)

Why did I place this trade?
  • stochastics in oversold region (check out my impeccable timing HERE)
  • 60.13% probability of success


Tue. 4/12/2016 (10:21:04 am, PT)

bought back both puts at $0.84 (debit)

 Why did I place this trade?
  • stochastics in overbought region (check out my impeccable timing HERE)
  • take profits


PROFIT:  $198 (in 5 trading days)


SUCCESS!








Thursday, April 7, 2016

Russell 2000 ETF (IWM) Call Options

4/6/2016 (8:44:34 am, PT)

sell -10 April 2016  $111 calls at $0.61 (bearish strategy)

Why did I place this trade?
  • stochastics in overbought region
  • buying momentum is decreasing
  • strong "up" day ( = higher call premiums)
  • 70% probability of success


4/7/2016 (11:08:55 am, PT)

buy back all 10 calls at $0.26

PROFIT:  $350 (in ONE day!!)


SUCCESS!