On 12/21, I went bearish on Boeing. It was just 1-2 days after the inaugural flight of their newest jet, 787.
I thought the market will sell on the news. I anticipate delivery problems. Technically, Boeing was showing signs of breaking down. It was hitting resistance, MA, stochastics and MACD are all turning bearish.
So I entered a put calendar on Boeing
BTO May 55 Put 5.28
STO Jan 52.5 Put
Cost: 4.3
PE : 20-25% ROI
2010 started with a bullish bang! BA did a reversal on me within 8 days. MACD reversed and a bullish signal was issued.
On Jan 4th, I quickly roll my Put from Jan 52.5 SP to Jan 55 SP for a credit.
o BTC Jan 52.5 Put for .5
o STO Jan 55 put for 1.2
It was apparent that my roll is not good enough. It broke out of 52 weeks high.
So I closed my short put and go for a Calendar strangle.
o BTC Jan 55 SP for 0.66
o BTO Feb 55 Call for 3.25. I also intend to carry this trade through the earnings period on first week of Feb.
The trade was profitable early this morning. I decided to get out for a 10.6% profit.
o STC Feb 55 Call for 5.1
o STC May 55 Put for 2.9
Not bad for a trade for less than 2 weeks.
I could have held the trade and get out at the end of the day for >15% profit. Or if the market is bullish, I could probably end up with my target 25% ROI. Boeing continued to ramp up today.
But I decided not take the risk. Since I was wrong in my direction in the first place, I am happy that I got out with a profit.
It was an exciting journey. I have safely landed!
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Hello,
ReplyDeleteI just wanted to see if you were interested in an options portfolio manager. We are creating a program that keeps track of all your trades and adjustments. If you are interested the program is still in beta and your input would be appreciated. The website is http://www.optionstracker.com
Jeff,
ReplyDeleteThank you for the offer.
I am using a customized tracker using Excell and it is working very well for me.
Nevertheless, I believe they will be people reading this blog who will be interested. I will check with them.
Thank you very much! Can I ask which features you like best about your excel program?
ReplyDeleteJeff,
ReplyDeleteThe features in my Excel program has the following features:
1. It caters for Spread, Covered Calls, Collars, Strangle/Iron Condor/Butterfly/straddle ( as a group) and Calendars.
It does analysis of my returns ( inclusive of Dividends ) and also a special feature to analyze ( or simulate ) ITM covered calls.
For calendars, I have inputs for key criterion that are important for me to enter my trade Eg: position theta, position delta, short premium /Long credit and no of days.
It records the price, date and fields for adding reference graphs and reasons for doing the trade.
2. It keeps track of all activities and my new positions. If I adjust, it will keep the records according giving me my new cost and potential ROI.
3. It gives me search capability in the case I need to adjust, I can go right to the stock right away.
4. It keeps my profit and loss monthly and YTD of all closed positions. For open positions, the broker program is keeping track of my progress.
I am not sure I have listed all the features. The key is that Excel makes it very flexible for me to change anything to fit my needs.
Very nice! Great job!
ReplyDeleteThat is exactly where I am headed with my program. It can already handle collars, covered calls, and pretty much any option strategy. It will give you the true cost basis, ROI/ROR after any adjustment.
That is a very good idea about the calendars I will have to look into that one more.
One of the main features that will be added in the future is having the ability to automatically download your trades with brokers compatible with the OFX format. I will also be able to add the ability to get real-time quotes through different brokers API. (You would have to have that broker).
Thank you for the information!