Another stock/option multi-legged trade that includes red ink

Here's another "adventure" trade.  As always, look at the dates.  For some reason I don't recall in precise detail at this moment, on May 22nd I bought 400 shares of SVXY at 91.30.  I think it had to do with some calls, and I wanted to protect myself by owning the underlying, and I decided to keep the shares and realize full profit on the short calls.  I do not pick and choose which trades to show unless it's because only some of them are pertinent to a conversation; all trades are posted each month in this space and also in the "all trades" tab.  So anyway, here we are going into the trade with 400 shares of SVXY  under my belt, so to speak.

So on June 1, with SVXY trading in the 89 range or thereabouts, some wild hare or other influenced me to write four puts at the 85 strike for the June 26th expiration.  I received $3.20 for each of these.  Translated, this means I expected to receive $1,280 for these at expiration, assuming the strike would not hit.

Then on June 9th, when SVXY was trading around 86 during the day, I decided to put a top on the cake by writing four calls for the same expiration, at the 91.50 strike.  Note that this is just a few cents higher than the price at which I bought the shares.  My expectation was that the shares could be called away for a tiny profit (any profit being better than any loss) and I would just keep the premium of $732.

On June 15th, I got bored with just waiting and waiting for this trade to unfold, so I "traded out of boredom" and wrote more calls (naked, because I didn't own any more shares to support these) but this time for the July 3rd expiration, and at the 93 strike.  SVXY was trading at around 88 this day.

So now I had a "strangle sandwich" (or you could say some naked puts and a set of covered calls) for the June 26th expiration and some naked calls for the July 3rd expiration.  On June 22nd, I got nervous as I saw SVXY creep up near the strike of my naked calls.  Being the responsible option writer that I sometimes am, I shelled out big $$$ to buy 400 freaking more SVXY at a cost of 92.90 per share (gulp), which is just below the strike on my naked calls of 93.00.

What do you think I did with this strangle? Any guesses?  Anyone followed along and read about how I closed some of this out?  Hint:  Look at my June 23rd post, a few inches down the page.  I feel bad that I just explained the same thing that I explained a week ago (on June 23rd, titled "Finished a $700 project 3 days early").  If anyone is enjoying reading this, then good for you - I am glad.  I think the only difference here is that I explained my strategy in more detail, and I included in the screen shot the short puts, which were a crucial part of the original strategy, which was a short strangle.  Can't have a strangle without both sides!  It's like having a sandwich with only one piece of bread.

The extra content in this post, as opposed to the one a week ago, is this explanation:  I bought the puts back on June 18th because I anticipated I would soon buy shares to make my naked calls into covered calls, and I didn't have the capital to do that without closing the naked puts.  Then I took my time watching the price of SVXY, hoping I would not have to buy shares, but that hope turned out to be in vain.

When you look at this all together, including the puts which were an integral part of the original strategy, you see that it came out to profit of $1,594, which is not bad for approximately 3 weeks' worth of shuffling, if you don't factor into that the date at which I bought the original 400 shares of SVXY, which, in all fairness, I bought during the legerdemain of some other past strategy.

Of course, if I had a crystal ball, or some as-yet-invented future-viewing goggles, I might not have bought that second lot of shares, and might have just realized the full $890 profit from the calls which were set to expire this week.  Instead I netted the buyback of the calls with the buying and selling of the stock for just a fraction of that.  But I do not have clairvoyant superpowers.  And SVXY ran up nearly to 98 three trading days ago.  What's a trader to do with their short calls, stand there with a "ROB ME"sign on the chest and back? And I decided I could "roll" those calls and maybe still get some good meat off the bone.  (Which remains to be seen.)

I really hope someone is enjoying reading this, and it isn't simply my own record, but if that's what it is, then it's better than a kick in the shins on a cold rainy day after missing the bus.

Look, though:  If you follow this blog, you'll know that just a few days ago I turned around and sold naked 99 calls (this is what I referred to regarding chomping some more meat off the bone).  What's going to happen with those?  I own no shares to go with them (hence, the designation "naked.")  What do you think will happen this week?  They expire on Friday.