All the trades entered assume that the market is going to be bullish for the next few days or even a few weeks.To enter trades with market condition as last week, it is imperative that secondary exit are clearly defined and promptly executed.
As long as the stock reverses close to last week low, a put will be added to the covered call. To make sure that it catches my attention, I have added alarm to the stock to alert me. If the stock continues its bearishness and exhibits an acceleration to the down side, I will roll down the SC and it will turn the whole trade into a bearish trade with a negative net position delta.
WYNN - a momentum play
STO August 145 SC 4
PE = 3.33 percent in 5 days by Aug option expiration
SE= add LP ATM and longer term SC if trade goes close of below 135
Update: Closed the trade on August 17th booking a profit of 708.92 or 2.5%.
I noticed that momentum has changed. I have made about 80% of the maximum profit in 5 days. I am not going to wait . So I got out. It was a good decision as the stock feel to 136 today. If I have not exited I would have to continue to add SC or collar it and wait for it to be profitable.
VXX - a volatility play
STO 1000 shares at 33.39 on Aug 8thSTO Aug 34 SP at 3.3
This is >10% premium for a slightly OTM synthetic put. Because of the the volatility and thus the fear in the market, the put premium is extremely high.
It is meant to be a very short term trade.
I closed the trade on Friday August 12 with
BTC 1000 shares at 32.9
BTC Aug 34 SP at 5
This is 3.38% profit in 4 days with minimum risk.
AAPL - a value play
I have been waiting to buy AAPL again. I decided not to wait. I am willing to hold on to the shares.
BTO on August 8th 100 shares at 365STO Jan 390 SC = 24.65
PE : Let the SC goes in ITM and profit of 13.6% in 4 months.
I decided to add a protective put on Friday because of the uncertain market. It may be too early but I believe I will need the put at least through October.
BTO Oct 360 P = 18.35
SE: if bearish, roll the SC down once APPL hits below 355 at the same month or further. Sell the LP once the bottom is almost established.
Update: I got out of the trade on August 12th with a profit of 1.5% in 4 days.
IOC - a natural gas play
I am bullish on natural gas longer term. When IOC dropped to around 50 on August 10 establishing a double bottom, I decided to get in with a collar.
STO Dec 57.5 SC for 4.05
BTO Sept 50 P for 4.05
IOC reported results on August 11th and it was positive. I added a August 50 SP for 0.8 establishing a put calendar.
PE: Let the SC goes ITM or called out by Dec for 18.5%.
My profit will be a little higher if I can manage the put side better by selling another SP for sept or getting rid of the put if the stock goes bullish.
SE: Roll down the SC if the stock drops below 50.
Also, consider rolling down the Aug 50 SP if it accelerates down next week before option expiration.
Update on August 18th.
o Sold a August 50 SP on August 11th to make it a bear put calendar.
o The stock continue to shoot up and the Dec 57.5 SC was ITM. There was a huge correction today. So I sold another Sept 45 SP to reduce the cost of my protective put.
VZ - dividend play
VZ is a fundamentally sound company. It pays a good dividend.
Technically the stock has hit a very strong support.
BTO 1000 shares = 34.01STO Jan 35 SC = 1.54
PE = SC goes ITM and stock called by Jan for profit of 7.4 % excluding dividend gains.
SE = add an ATM put if stock goes below 33. Roll the SC down if the stock continues to go down and any signs of acceleration.
I entered quite a few trades last week. I was not afraid because I know I am ready to turn this into a neutral or bearish bias trade once the trend changes.
The volatility is so high and thus it was good time to capture premium on some good fundamental stocks especially when it is deemed to have reached important support.
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