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Friday, May 6, 2016

Tesla (TSLA) Post-earnings play

Thursday, 5/5/2016 (11:18:43 am, PT)

sold -1 May 6, 2016  $205 put at $0.91

Why did I place this trade?
  • earnings were announced after the close on 5/4/2016
  • the stock dropped on 5/5, so implied volatility was still high
  • quick, 1-day trade to take advantage of the inflated IV
  • 79% probability of success
  • Robyn at Tasty Trade sold the May 6 $210 put (thanks, Robyn!)

Friday, 5/6/2016 (9:36:42 am, PT)

buy back put at $0.05

PROFIT:  $86 (in ONE day!)

SUCCESS!

Comments:
  • My put option hit $0.04 at 6:34 am this morning (5/6), but I had forgotten to set a "buy to close order at $0.05" last night, so I missed it this morning.
  • Between 6:34 am and 9:36 am, TSLA dropped, so the put price rose again.
  • The market makers made me suffer for 3 hours before finally accepting my bid of $0.05.

The moral of the story:

ALWAYS have your closing orders in place!!!

Tuesday, May 3, 2016

Energy Sector (XLE) Call Options

Friday, 4/29/2016 (10:33:59 am, PT) (FP)

sell -10 May 2016  $70 calls at $0.51

Why did I place this trade?
  • stochastics in overbought region
  • 78.60% probability of success

Tuesday, 5/3/2016 (7:35:23 am, PT)

buy to close calls at $0.21

Why did I place this trade?
  • take profits at 50% of max credit

PROFIT:  $300 (in 3 trading days!)


SUCCESS!

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!


Wednesday, March 30, 2016

LinkedIn (LNKD) Put Options

Tue. 3/22/2016 (11:16:09 am, PT)

sell -1 Apr 1, 2016 (week 1)  $111 put at $1.14 (credit)

Why did I place this trade?
  • stochastics in oversold region (see chart HERE)
  • high implied volatility
  • 70% probability of success


Wed. 3/30/2016 (10:45:41 am, PT)

buy back put at $0.43 (debit)

Why did I place this trade?
  • On 3/29/2016, LNKD was downgraded 
  • On 3/30/2016, LNKD miraculously jumped over $3.00, so I closed my position to take PROFITS
GROSS PROFIT:  $71


SUCCESS!


Tuesday, March 29, 2016

Gold (GLD) April Put Options

Thu. 3/24/2016 (12:20:55 pm, PT) FP

sell -10 Apr 2016  $112 puts at $0.41

Why did I place this trade?
  • stochastics in oversold region
  • 83% probability of success


Tue. 3/29/2016 (11:46:40 am, PT)

buy back all 10 puts at $0.17

Why did I place this trade?
  • GLD up over $2.00
  • TAKE PROFITS

GROSS PROFIT:  $240 (in 4 trading days)


SUCCESS!



Wednesday, March 23, 2016

Gold (GLD) Call Options

3/22/2016 (11:37:16 am, PT)

sell -10 Apr 1, 2016 (wk 1)  $121.50 calls at $0.51

Credit received:  $510

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


3/23/2016 (12:45:14 pm, PT)

buy back all 10 calls at $0.17

Why did I place this trade?
  • GLD down $2.61
  • take PROFITS!

PROFIT:  $340 (in ONE day!)


SUCCESS!



Gold (GLD) Call Options

3/22/2016 (12:35:32 pm, PT)  FP

sell -10 Apr 1, 2016 (wk 1)  $123 calls at $0.29

credit received:  $290

Why did I place this trade?
  • stochastics in overbought region
  • 85% probability of success


3/23/2016 (11:58:37 pm, PT)

buy back all 10 calls at $0.12

Why did I place this trade?
  • GLD down $2.29
  • take profits!

PROFIT:  $170 (in ONE day)


SUCCESS!




Friday, March 18, 2016

Spiders (SPY) Mar debit put spread

2/19/2016 (12:38:30 pm, PT)

buy +1 March 2016  $187 put at $2.58
sell -1 March 2016  $186 put at $2.31

net debit:  $27 (max risk)
potential profit:  $73 (max)


Why did I place this trade?
  • stochastics in overbought region
  • I was bearish but I didn't want to risk too much money in case I'm wrong
  • trying my luck with a small debit trade


3/18/2016 (expiration)

SPY closed at $204.38, so my entire debit spread expired worthless  

TOTAL LOSS:  $27

COMMENTS:
  • Even though SPY was in the "overbought" region on 2/19/2016, there's no guarantee that it would reverse and go back down.
  • OTM debit trades are risky and have a low probability of success.
  • I was just having some "fun" and decided to try my luck on this "casino play."
  • I was only risking $27 which is manageable.

Friday, March 11, 2016

QQQ Put Options

1/12/2016 (10:48:51 am, PT)

sell -1 Feb 2016  $105 put at $3.11

Why did I place this trade?
  • stochastics in oversold region
  • high implied volatility
  • 47% probability of success (almost 50/50)

Comments:
  • This put option was $0.16 in-the-money at the time.  
  • I don't normally sell puts that are ITM, but I was just having some fun plus I knew I could fix the trade if it went against me.


2/12/2016 (10:06:10 am, PT)  [roll]

buy to close 1 Feb 2016  $105 put at $7.55
sell to open 1 Mar 2016  $105 put at $8.34

Net credit for roll:  $0.79

Comments:
  • I decided to roll on 2/12 because my put was ITM with only $0.11 of extrinsic value remaining.
  • On exp. Friday (2/19), QQQ closed at $101.63.


3/11/2016 (7:21:44 am, PT)
buy back March $105 put at $0.97

Comments:
  • My put was finally OTM again with 5 trading days left, so I decided to close my position and take profits.

GROSS PROFIT:  $294 (in 2 months)

SUCCESS!


Thursday, March 10, 2016

Spiders (SPY) Ratio Put Spread

2/4/2016 (11:10:51 am, PT)  FP

buy +1 March 2016  $181 put at $2.78
sell -2 March 2016  $180 puts at $2.55

Analysis:
  • Net credit received:  $2.32 x 1 x 100 =  $232
  • Theoretical max profit:  ($2.32 + $1.00) x 1 x 100 =  $332
  • Stochastics in overbought region


2/11/2016 (11:28:05 am, PT)

sell (close) 1 March 2016  $181 put at $6.32
(stochastics in oversold region)


3/10/2016 (6:30:03 am, PT)

buy back remaining 2 short puts at $0.05

GROSS PROFIT:  $854  (GREAT trade!!)

COMMENTS:
  • My actual gross profit of $854 is much higher than the theoretical max profit because I "broke apart" my ratio spread and sold (close) my long put on 2/11/2016 when SPY was at the bottom. 
  • Once I sold (close) my long put, I ended up with an extra "naked" put.


SUCCESS!



Tuesday, March 8, 2016

Spiders (SPY) March Puts

2/10/2016 (12:36:38 pm, PT)

sold -1 March 2016  $177 put at $3.11

Why did I place this trade?
  • stochastics in oversold region
  • high implied volatility
  • 70% probability of success


3/8/2016 (11:14:52 am, PT)

buy back my put at $0.05 to remove the risk and take profits

PROFIT:  $306

SUCCESS!