Nerve Tester

It was a nerve-tester yesterday and even today (see orange arrows for a few examples of un-fun moments):

 But the end-of-day report was a good one:

Prices on those things as of 3:59 PM:

 

Another one brought it for total maximum profit.

Follow me on Twitter: @grapeswhiz

I simply hoped I wouldn't botch it

Ringing the register, closing the till.  Til next week.  Happy weekend to all fellow traders - may you celebrate your good trades, or forget your bad ones and look forward to future good ones.

I made a wager, I took a bet. I think this was the best one yet.  

I didn't sweat, I didn't watch it. I simply hoped I wouldn't botch it. 

Ledger sheet sees nice black ink. Next week could bring red, I think. 

One day's problems at a time. And don't say everything in rhyme.

Truth:  This is what I DON'T look like all week, looking at my trades:

Follow me on Twitter: @grapeswhiz

Should I just give up?

I think of myself as someone who makes reasonable efforts to keep up, or who really just stays near the forefront effortlessly through my default state of absorbing and reading during each waking moment the same way I breathe on a constant basis (doing the latter even in my sleep), but obviously I have slipped behind if I failed to notice "Fintok." If the financial advice is now being dispensed on TikTok, I should just turn in my keycard right now.

Had it not been for @chigrl letting me on this, I'd forever be uninformed.  Financial community - Stop the ride!  Let me off!

Follow me on Twitter: @grapeswhiz

Another day, another 96 cents (per contract)

Instead of combing the halls of Twitter for wit and wisdom, today I'll simply paste a copy of my doings that turned out to provide a little Friday paycheck (but could have sent me down the hall for a visit to the Principal's office or at least a red-ink reconciliation in the accountant's office.)  I went out on a limb yesterday and came back in, and I brought back a little bit from my hunting and gathering expedition.

The profitable life isn't a predictable life, and while I could just pick up pennies in front of the steamroller as some underwear trader accused me of last week, it's not my style, so I prefer to suffer through middle-of-night future-checking and pre-market wake-up times, and also daytimes sometimes too stressful to remember to eat, so I can go for the dollars and not the pennies.

Follow me on Twitter: @grapeswhiz

Ramp or plunge?

The age-old question plaguing weary traders at the end of the day when all the coffee has been run through and the dreams have been dashed (or fulfilled with maniacal loud proclamations) - will the day end in a ramp or a fizzle?

Here, some keyboards have been slammed and a few curse words uttered.  Would that be surprising?

Looks like both Pete Phillips (@pistolsout) and dave dave dave (@davedavedave224) were right.  And the majority of voters (including myself, voting without looking just so I could open up the poll results for display) were wrong.

Follow me on Twitter: @grapeswhiz

Commentary not investment advice

Today's impression of the markets comes from Jeremy N (@jbergASU), hailing from the esteemed university of AS and also the university of SDS, calling the S&P's observed chart activity, at least as of 1:15PM Eastern, to be representational of a top.

 

 A reminder from Jeremy is that his commentary is not investment advice.

Follow me on Twitter: @grapeswhiz

Where she stops, nobody knows

As after-hours trading is a little elevated, Twitter pundit "D" (@FigureNyenterms) of the inscrutable handle and display name provides a hazy, clouded magic-8-ball-style prognostication for the morning (I think.)  Since there wasn't much punctuation, his (or her) reckoning is open to interpretation.

Now, I don't know who would be in their pajamas at four in the afternoon, other than those who never shed them throughout the duration of the day.  And I strongly suspect that "D" is, in fact, in pajamas if anyone is.  But the important point here is the sentiment:  That the open will be lower tomorrow.  We all put our pajamas on one leg at a time, and none of us really know what's going to happen, but there's a good chance "D" will wake up doing the "Told You So!" strut.  

 **Edit:  Clarification from FigureNyenterms says that he is trying to outsmart the pajama traders who are interpreted to be voting with their trades for a lower open, while he sees the open higher. **

Follow me on Twitter: @grapeswhiz

What's better than premium? DOUBLE premium

Two scoops, please. That's what UVXYTrader (@michaellistman) said this morning when he got a scoop of put premium and a scoop of call premium on his ice cream cone. With UVXY trading at approximately 21.90, he brought in 86 cents of premium per contract on some puts for the 21 strike expiring this Friday and 1.77 per contract on the associated calls, all of which he sold short.  Let's see what happens for the rest of the week and how this trade comes to a close through some method or another.  2.63 (or $263 considering the type of contract these were) was deposited into his account, per contract (of which the quantity is unknown or let's say, it's not going to be discussed here, at any rate.) 

Later in the week we will discuss the eventual resolution of this contract, wishing the best possible outcome for UVXYTrader.

Follow me on Twitter: @grapeswhiz

Math Wins

While "Math Wins" (AKA "Let's Move Money") is looking for $UVXY to rip, I'm always looking for it to slip.

Here's my math for today:

While thieves are looting from one door of your business, as long as you are ringing the register to a greater degree at the other door, you can close up shop at the end of the day and count your profits.

Follow me on Twitter: @grapeswhiz

That's a fast steamroller

It may not have been me, but I feel quite sure that some people picked up more than pennies today (and that others came out "flat," and by that I don't mean no profit or loss - I mean what the steamroller does to you.)

Below I get schooled by a 15-year-old hedge fund manager:

Who has stories today about surviving (or not) the VIX carnage?

Follow me on Twitter: @grapeswhiz

grapes trades on

Party on, Wayne. Party on, Garth. Trade on, grapes. 

Watch this space to see if and what I feel like talking about. Let's talk first about the conversation I see tonight on Twitter.

This man, who goes by the name of "Bat," if I remember correctly, has expressed his observation that the VIX is acting in an uncharacteristic manner this afternoon. Fellow trader with a cat for an avatar postulates that the Fed will be the arbiter of which way the horse manure drops when it does. Plop, plop, plop - VIX will do the drop, drop, drop. Let's all crowd around (at a safe distance) to see it happen tomorrow.

Follow me on Twitter: @grapeswhiz

Mayday

See new trades in tab. 

Starting TODAY!  (edit as of August 2020 - don't go look for those tabs - they are currently down for repair, but will be back up eventually.)

Clean slate

Closed a complex, multi-month trade that wasn't looking profitable at many points along the way, but knowing how the security I trade behaves, I managed it well enough to come out the other side with a profit. I could have kept it going, but chose to close it and re-short a different quantity with different associated options, along with one different security added in to the mix. Details on those trades will be forthcoming as they unfold. See the "Collar and other strategy" tab for the final outcome of those and other trades made since April of 2018.

A narrow escape

Considering that I was looking at an unbooked $4,500 loss yesterday with no end in sight, this grand total isn't much, but I'll take it.

A lesson in how NOT to trade.  Multiple overnights with naked shorts, and much spinning of plates (the calls), which did actually net profits for me, but ultimately put me in line for more risk than originally intended.

August 9th -16th
Sold short 3,000 UVXY at 8.20, credit $24,594.37.  Bought qty 30 UVXY Aug 10th 8 strike calls for 0.25, debit: -$770.37. Max risk: -$170.37
Sold all UVXY Aug 10th 8 strike calls for 0.645, credit $1,915.52. Profit booked: $1,145.15 
Bought qty 30 UVXY Aug 17th 8 strike calls for 1.00, debit: -$3,020.37. New max risk -$1,275.22
Sold all UVXY Aug 17th 8 strike calls for 1.18, credit $3,519.52. Profit booked: $499.15. 
Bought qty 30 UVXY Aug 24th 8 strike calls for 1.12, debit: -$3,380.37. New max risk -1,136.07
No calls held at many points; risk unlimited.
Sold all UVXY Aug 24th 8 strike calls for 1.68, credit $5,019.50 
Bought to cover 3,000 UVXY at 9.179, debit -$27,541.95
Grand outcome: +$338.85

See the Completed Collar tab

Although there aren't many completed collars in there (any?)  Well, I'm not going to detail every move here, but you can see the details there.  I'm using money I really can't afford to carry short in UVXY, thus the need for protective calls.  The calls cut into my profits, in every case, but they also have the potential to bail me out, so they're a necessary cost of doing business in this case, for me. 

I do try to finesse the entries so that I gain an advantage by waiting on either the shares or the calls, and usually that ends up working against me.  But sometimes it helps, as in June 18th.  I picked up a lot of gravy by hanging back a while.

The order (of the shares and calls) is not necessarily indicative of the order I executed the trades.  I might record them in either order, even though I executed them the other way around.  It's hard enough to find and record all of this, and I'm not trying to recreate it by the second.  Although of course the basic strategy (opening both and then closing both) is recorded as it was actually done.  Usually I open the shares first, and then the calls, but it could be the other way around.  At times I have gotten greedy and traded the calls out in the middle of the trade, allowing the shares to ride naked before covering them with replaced calls. This is detailed, of course, if it was done.  Results have varied (beneficial or not beneficial to me.)  Many times I close the calls and let the shares ride for a few minutes to the remainder of the day.  Occasionally I have closed all the shares and then re-opened them for a day trade, although I don't think I've done that without having ditched the calls first.  The last thing I want is some depreciating calls hanging around, so I tend to get rid of them ruthlessly (there could be instances in which they increase in value, but I don't think I've encountered that in a while, or if so, I just looked the other way, because I didn't want to see what I missed out on, and had already moved on to the next trade.)

Here is a clip of the tab which you really should be reading if you want to follow along.  The tab is right here, if you're having trouble finding it.

Another winner. What's for dinner?

No need to complete the collar when the funds are there waiting for the taking, so take them I did.  See completed collar tab for details.  Should I start another one?  Why not?!

The tl/dr is:

+$605.58

Half is better than nothing

Closed the reverse collar (described in previous post) before expiration.  See this page for details.  Don't be afraid to click on it.  It's just the completed collar rundown page.  Or if you are suspicious or wary about clicking on links, just navigate your own darn self up to the link above and feel accomplished at pressing your finger directly there, to get to the same place and view the details.

I bought back the puts, I sold off the calls.  The shares didn't exactly go over the falls...

[end poem]

... so I just covered them.

How to make $1,000 in three easy steps

Would you like a $1,000 paycheck in one week while doing basically nothing to earn it?   Well, nothing's free, so you'll have to pay with your nerves, at least for a little while, and that means you'll have to put something at risk, initially.  But what if you could construct it so that you know what you'll lose, worst case, and then construct it further so that you won't lose anything, if you're unlucky enough that you're passed over on the day the paychecks are handed out?  Would you like to try for $1,000 or nothing?  Follow along with what I did.

Step 1:  Buy 20 UVXY calls at the 12.00 strike, May 18th expiration for $0.75 each.  The multiplier is 100, so this will cost you $1,500.

Step 2:  Sell 2,000 shares of UVXY short at 12.30.  This requires enough margin to be permitted to do that.

Step 3:  Sell short 20 UVXY puts at the 11.50 strike, May 18th expiration for $0.45 each.  This will bring in $900.

You've now only effectively paid $600 for the options (setting the credit received for the puts against the cost of the calls), and you have thirty cents of profit you could reap on the shares, if you actually exercised those calls to cover the shares at the strike of 12.00, which comes out to $600 coming in to offset the price paid, so that's all you'll see, worst-case.  A total wash, with zero paid and zero lost.

Yet, should things go your way, you'll see a profit of up to $1,000.  Should UVXY end up below your put strike price, and the shares end up put to you, you'd use them to cover your short, so that's 12.30 minus 11.50, or a $1,600 profit on the shares, and as detailed above, you paid $600 for the combo of puts/calls.

Max loss:  $0

Max gain: $1,000

Expiration date:  May 18th

Follow-up to yesterday's post - completion of trade

Collar closed without completing the put side; calls sold and then shares bought to cover as such:

April 27th: Quantity 17 of April 27th UVXY 114.50 calls sold for 0.75, or debit $1,261.20.
1,700 UVXY bought to cover at 15.015, credit $25,530.45.

Grand total for the trade: -$277

Note that original risk was $1,356.70, reduced sequentially to $659.70. Calls were closed earlier than shares on expiration day to maximize recovery of the shares without degradation of option prices counteracting that recovery, in order to seek final outcome better than the max loss of $659.70 if options had been exercised.

See detail:

See new tab at top "COMPLETED COLLAR (or other spread) HISTORY" for ongoing summaries of collars without detail and narration.

April 18th collar started, expiring April 27th

UVXY collar started April 18th:

April 18th:  Sell short 1,700 UVXY at 14.61.  Credit: $24,838.07
April 18th:  Buy 17 UVXY April27th 14.50 strike calls for 0.90 each.  Debit: $1,543.70

Initial risk:  Cost of calls minus potential profit on shares if exercised:  0.11 per share profit would be $187.  Total risk: $1,356.70

April 19th:  Sold above calls for 1.29.  Profit booked: $635.
April 19th:  Bought same calls for 1.12, cost $1,917.70.   New risk, minus profits:   $1,095.70

April 20th:  Sold above calls for 1.37. Profit booked: $397.
April 20th:  Bought same calls for 1.25, cost $2,138.73.  New risk, minus profits: $919.73

April 24th:  Sold 10 of the above calls for 2.33. Profit booked: $1,062. 
April 24th:  Bought same 10 calls for 2.05, cost $2.060.12. Add to cost of other 7 calls bought on the 20th for 1.25, cost of $880.66, for total cost of $2,940.78. New risk, minus profits: $659.70