VEGA Trading

Update 1/20/12

2012-01-23T09:39:00.000-05:00

I have decided to indefinitely delay the conversion to the new website, so for now I will continue the VEGA Trading blog as in the past year.

BIIB PCCRC

There were no adjustments made in the BIIB position last week. I will likely close the PCCRC sometime this week and at this point it looks like it will end up near breakeven. Currently there is a 2% profit in the BIIB PCCRC.

CTAS PCCRC

Originally I had planned on documenting this trade on the new site, but since it has been delayed for at least 6 months, I decided to add it here. On Jan. 3 I bought a PCCRC in CTAS at the 35 strike. Currently the position shows a 3% profit.

Update 1/11/12

2012-01-13T17:15:00.000-05:00

BIIB PCCRC

Today I rolled the shorts in the BIIB PCCRC from Jan to Feb for a 3.65 credit. Profit now stands at 3%. BIIB reports earnings on January 31 so the position will be closed completely in the next 2 and 1/2 weeks. This will be the last documented trade on this blog. I will transition to a new site and format that will be announced here. I have opened a few new PCCRC's (CTAS, CVS, MON, FDX) in the last couple of weeks that will be documented on the new site- stay tuned.

Update 1/2/12

2012-01-02T14:27:00.001-05:00

Happy New Year! I have not made any trades over the holidays as IV typically is dropping during this time of year. I expect some new PCCRC opportunities to become available in January. I also am planning on opening a new website in January that will replace this blog. More details will follow soon.

BIIB PCCRC

No trades have been made in the BIIB position after rolling to January. Profit now stands at 2%.

Update 12/9/11

2011-12-09T16:44:00.001-05:00

MCK PCCRC

MCK was closed today as it had become a loser a week before the short expiration. The position was closed by selling 2 8/8/-5/-5 MCK Feb/Dec for 42.95 credit. The final tally on the trade was a loss of 4%.

BIIB PCCRC

Today I rolled the shorts in BIIB from Dec to Jan for a $5.50 credit. Profit on the trade is now at 6%.

Update 12/2/11

2011-12-02T16:38:00.001-05:00

MCK PCCRC

No trades were made on MCK the last 2 weeks. Profit is down due to the rallying market and falling IV. Currently profit is 2%.

BIIB PCCRC

No trades were made in BIIB either. Profit now stands at 5%.

IV usually drops in December so I will not be looking for new trades until the first of the year.

Update 11/18/11

2011-11-18T16:07:00.001-05:00

MCK PCCRC

No trades were made to the MCK position this week. MCK dropped a couple of points on the week but still has a 9% profit.

ROST Call Seagull

On Monday I closed the ROST position with 2 orders shown in the risk graph. The final tally on the trade was a profit of 3%.

GOOG Put Seagull

I also closed GOOG on Monday by selling the Put Seagull for a 112.90 credit. The final result on GOOG was a $30 profit.

BIIB PCCRC

No trades were made on the BIIB position this week. Currently BIIB is showing a 4% profit.

Update 11/11/11

2011-11-12T08:32:00.001-05:00

MCK PCCRC

No trades adjustments were made to MCK last week and it continues to do well boasting a 10% profit.

ROST Call Seagull

No adjustments were made either to ROST this week. ROST has earnings next Wednesday so I will be closing the entire position early next week. Currently there is a slight profit of 2%.

GOOG Put Seagull

Friday the GOOG position became profitable for a while, although at the close Friday it was back in the red. I have not closed or rolled the position, but I will make that decision and trade early next week. The currrent loss is 1%.

BIIB PCCRC

On Friday I opened a new PCCRC in BIIB. It moved in a positive direction after the trade opened and is already posting a 2% gain.

Update 11/4/11

2011-11-04T23:02:00.001-04:00

DLTR PCCRC

On Tuesday I closed the DLTR PCCRC with two orders as the position had 5 legs. The final tally on the trade was an 8% profit.

MCK PCCRC

I adjusted MCK on Tuesday by selling 4 Feb straddles for $11.25 credit. This was done to take some profit after an IV spike on Monday and Tuesday. Currently the position is profitable at +7%.

ROST Call Seagull

I did adjust ROST also on Tuesday by rolling 6 Jan Calls from the 80 strike to the 90 strike for a $5.90 credit. Profit is now at 6% on this position.

GOOG Put Seagull

No adjustments were made on the GOOG position and it is showing a loss of 4% despite being close to the short strike price. If things do not reverse this one will be closed next Friday.

Update 10/28/11

2011-10-30T23:04:00.000-04:00

I was on vacation last week and was unable to update the blog until now.

DLTR PCCRC

No trades were made in the DLTR position the last two weeks and the profits have been dropping with the market rising and IV falling. The position p/l is now virtully flat.

MCK PCCRC

On Friday I opened a new PCCRC in MCK by buying the Feb/Dec PCCRC at the 85 strike for 13.60. The position currently has a loss of 1%.

NVS PCCRC

I closed the NVS PCCRC on October 20 by selling the position for a 10.25 credit. The final tally on the trade was a 9% profit.

ROST Call Seagull

No trades were made on the ROST Call Seagull the last 2 weeks although in looking at the risk graph, it is at a point where an adjustment could be made to lock in some profits. There isn't much profit to lock in at this point as profit currently is only 4%, but I will watch the position this week to determine if it should be adjusted.

GOOG Put Seagull

The GOOG Put Seagull has not done well with the drop in IV the last two weeks. No adjustments were done and the position has posted a 9% loss.

Update 10/14/11

2011-10-17T09:26:00.000-04:00

DLTR PCCRC

DLTR lost quite a bit of its profits with the market moving up and IV falling. It is still profitable though so on Friday I rolled the shorts out to November for a $1.50 credit. Profit is now at 8%.

NVS PCCRC

No trades or adjustments were made to the NVS position last week. Normally I would have closed the position with earnings a week away, but I decided to give the position a few more days and will try to close on a day when IV is up. Profit was also down last week and is now at 7%.

ORCL PCCRC

ORCL profit was down last week as well to the point that there was a loss on the position. Since I do not roll a position that is showing a loss I closed the position on Friday for a $7.97 credit. Final tally on the trade was a 1% loss.

ROST Call Seagull

ROST also lost some profits last week but still had an overall profit so I rolled the shorts out to November for a $1.65 credit. The current position shows a profit of 6%.

GOOG Put Seagull

GOOG had a nice jump after earnings on Friday and I opened a new Put Seagull Jan/Nov at the 600 strike for $112.80. Despite GOOG dropping almost 10 points after opening the position, the overall profit is flat.

Update 10/7/11

2011-10-09T23:27:00.002-04:00

DLTR PCCRC

DLTR was up a couple of points this week but IV fell some dropping profit in the position a little. No adjustments were made to the position and profit is now at 23%.

NVS PCCRC

NVS was pretty flat on the week and profit remained flat also and is currently 13%.

ORCL PCCRC

ORCL was up about a point last week and profit was up a little also. If it stays near the short strike the rollover next week will yield more credit. Profit is now 8%.

ROST Call Seagull

ROST was up 2 and 1/2 points this week and profit was up also. No adjustments were made and total profit is now 12%.

Update 9/30/11

2011-09-30T17:27:00.000-04:00

DLTR PCCRC

DLTR was down every day this week but IV continued rising yielding additional profits. Overall profit is now 26% and if it continues much higher I may lock the profits in and close the position.

NVS PCCRC

NVS moved up most of this week and closed 2 points higher for the week. Profit was up a little and now registers a 14% gain.

ORCL PCCRC

ORCL ended up flat this week after rising early in the week and falling back late. There is now a profit of 7% on the ORCL trade.

ROST Call Seagull

ROST followed the same price pattern as ORCL this week and ended up almost a point higher. Profit moved up slightly as well and now stands at 9%.

Update 9/23/11

2011-09-24T19:45:00.001-04:00

AAPL Put Seagull

AAPL moved higher the first 3 days of last week and I booked the profits and closed the position on Wednesday. The closing order was for a 61.05 credit giving a final profit total of 33%.

DLTR PCCRC

DLTR was also higher the first 3 days of last week and on Wednesday I rolled the extra long calls up to the 77.5 strike for a $4.70 credit to lock in some gains. This adjustment made the trade more delta neutral and when DLTR dropped later in the week additional gains were made. You can see the difference by comparing the risk graph without the adjustment:

to the risk graph with the adjustment:

Overall profit is up to 22% in DLTR.

NVS PCCRC

No adjustments were made in NVS last week. The stock moved up Monday thru Wednesday dropped Thursday and moved back near breakeven on the week Friday. There was a rise in IV giving an overall profit of 14%.

ORCL PCCRC

On Wednesday I opened a new PCCRC in ORCL after the stock rose > 8% after earnings. ORCL moved down by the end of the week although profit has remained flat.

ROST Call Seagull

No adjustments were made on ROST last week. The stock followed the same pattern, 3 up days, down Thursday and flat on the week. There is now a profit in ROST of 8%.

Update 9/16/11

2011-09-16T20:52:00.002-04:00

AAPL Put Seagull

I said I would watch AAPL closely this week but I didn't (very busy week) and about $1100 in profit came out of the position. AAPL moved higher this week and if it keeps going up I could make those profits back. Since the longs are Nov there will be no more rolls of the position, just deciding when to close it. Current profit is 22%.

DLTR PCCRC

DLTR also moved higher this week, however, unlike AAPL, the profits on the DLTR PCCRC went up. If it moves a couple of more points higher I will look at locking in some profits with an adjustment, either rolling the long calls to a higher strike or selling some of the extra long calls. After a week in the trade, DLTR shows a profit of 9%.

NVS PCCRC

NVS was fairly flat for the week after moving down Monday then up the rest of the week. It is hanging around the short strike which is ok and profit was up a little on the week and now stands at 11%.

ROST Call Seagull

I opened a new Call Seagull today in ROST after finding it in ascan for new 52 week highs. There is a 1% loss on ROST as of Friday's close.

Update 9/9/11

2011-09-10T13:48:00.001-04:00

AAPL Put Seagull

I rolled the shorts in the AAPL position from Sep to Oct on Friday for a $11.00 credit. In looking back over the last couple of posts it looks like I was using the wrong original cost basis for the % gain calculation. The original trade cost was $14,690 so two weeks ago the profit was 26%, last week the corrected profit is 24%, and today the profit now stands at 30%. In my experience with PCCRCs and the synthetic seagull equivalents, the profit typically has an upper limit around 30% barring an unusual price move (like a takeover), so I will watch the AAPL position closely from here and may lock in the profits by closing the position if I feel like the profits are starting to decline. Looking at the risk graph and comparing the current line (white) with the expiration line (red) it appears the profit can only go down from here.

DLTR PCCRC

DLTR dropped a little over a point last week but the profit on the position is unchanged at 1% as the IV rise offset the delta loss. No adjustments were made on the position.

NKE Call Seagull

The NKE Call Seagull gave some nice profits on Friday and I closed the entire position for a 17% total profit. With earnings coming up in a couple of weeks it did not make sense to roll the shorts to Oct only to close them a short time later. With the spike in IV Friday it was the perfect time to close NKE.

NVS PCCRC

NVS dropped 3 points this week and the spike in IV added some profit. I rolled the short options from Sep to Oct for a $2.50 credit. This roll reduced the debit and risk of the position by $2750. Profit is up to 9%.

Update 9/2/11

2011-09-02T18:11:00.000-04:00

AAPL Put Seagull

The AAPL trade continued to do well this week despite AAPL stock falling 9 points on the week. There were no adjustments made on the trade although I will be rolling the short Sep options in the next 7-10 days. Currently profit stands at +30% after losing some ground this week.

DLTR PCCRC

Today I was filled on a new PCCRC in DLTR. After 1 day there is a 1% profit in the DLTR PCCRC.

NKE Call Seagull

With earnings coming in a couple of weeks I will be closing the NKE Seagull soon. No trades were made this week and profit in NKE has fallen to +9%.

NVS PCCRC

NVS was up abouyt 3/4 of a point this week, but profit has fallen. As long as there is at least some profit I will be rolling the shorts to Oct in the next week. Currently overall profit is +2%.

Update 8/26/11

2011-08-27T14:21:00.000-04:00

AAPL Put Seagull

AAPL moved higher this past week although the move caused iV to fall bleeding out some of the profits. AAPL is approaching the short strike at 390 so I expect profits to pick up when Sep Theta starts kicking in. Currently there is a 33% profit.

NKE Call Seagull

NKE also moved higher this week slightly above the short strike. The IV skew has narrowed giving the position an additional $1000 of profit this week. The total profit is now at 11%.

NVS PCCRC

NVS moved up a little this week and is sporting a small 3% profit thus far.

Update 8/19/11

2011-08-19T17:45:00.004-04:00

I created this last Friday, but for some reason it didn't post. Sorry for the delay.

LULU Bullish Butterfly

I closed LULU on Tuesday by selling the inverse of the position for a 6.10 credit. LULU crashed downward since then showing the danger of holding a directional butterfly too close to expiration. Today the position would have been a max loss, but by getting out Tuesday LULU posted a 74% gain.

KMX Put Seagull

I decided to close the KMX Put Seagull yesterday as it was posting a small loss and I have a rule not to roll losing PCCRC positions. As it turns out this one would have been profitable by today but it wasn't worth the risk. The final tally on this trade was a loss of 2%.

JOYG Call Seagull

I also closed the JOYG call seagull on Tuesday. When IV in the long options get over 50 I usually will exit a PCCRC. The JOYG ended up with a 9% profit.

AAPL Put Seagull

I rolled the shorts in the AAPL Put Seagull out to September yesterday for a 7.5 credit. This trade is doing well and boasts a profit of nearly $5k.

NKE Call Seagull

On Monday I opened a new Call Seagull in NKE. After 4 days the position sports a 4% profit.

NVS PCCRC

Today I opened a new PCCRC in NVS. This one is iffy as the IV/SV is over 1 but the risk graph looks really good almost completely above 0, so we will see how it does.

Update 8/12/11

2011-08-12T21:17:00.000-04:00

LULU Bullish Butterfly

LULU rose most of this week allowing the butterfly position to regain most of the profits lost last week. With the options expiring next Friday I will be watching closely to decide when to close the position. Current profit is 61%.

KMX Put Seagull

KMX initially went lower this week but recovered later in the week to finish flat for the week. Normally I would have rolled the shorts today, but with the market moving higher I have decided to wait until Monday or Tuesday to see if KMX can move closer to the short strike at 32. I did take some Vega profits by selling 3 straddles for a 6.70 credit. There is a total profit on the position of 4%.

JOYG Call Seagull

I also took some profits in JOYG by rolling 2 more long puts down to the 80 strike for a 10.50 credit. I am waiting on rolling this one also although I may decide to close it instead next week. Currently there is a profit of 21%.

AAPL Put Seagull

The AAPL Put Seagull has done very well and with IV only in the mid-30s I may continue this trade another month. I am also giving AAPL a couple of more days to get closer to the short strike which will increase my credit when rolling. Currently AAPL shows a profit of 31%.

Update 8/5/11

2011-08-05T20:45:00.000-04:00

The market meltdown was very good for the PCCRCs late this week, giving the account a 9% gain the last two days.

LULU Bullish Butterfly

LULU dropped with the market the last two weeks and was also hurt by rising volatility. The profit is about half what it was two weeks ago but if we get a bounce back the position will be fine. Current profit is +28%.

KMX Put Seagull

KMX finally turned slightly profitable today and I took some profits by selling 2 Oct 32 Puts for 5.10. This will help the position a little if KMX reverses and moves up and also reduces the risk slightly. Current profit is +1%.

JOYG Call Seagull

JOYG moved down with the rest of the market and yielded some nice Vega profits. I adjusted the position by rolling 4 Puts down for a 10.40 credit. Here is the risk graph just prior to the adjustment:

Note how the current price is below the lowest dip on the left hand side of the graph. If JOYG reversed and moved up some I would lose some profits. Here is the position after the adjustment:

Note how I am now centered in the dip and a move in either direction will bring more profit. A move up will now be more profitable than before and I have reduced the debit by over $4000. Currently the profit stands at 20%.

AAPL Put Seagull

AAPL has hung in fairly well with the drop in the market and the price has stayed inside the "cone" area of the risk graph so I have not made any adjustments. Profit now stands at 23%.

Vacation 7/29/11

2011-07-30T19:05:00.000-04:00

I was on vacation the week of July 29, so I am not updating the blog this week. There were no trades or adjustments made. I will update the risk graphs and trades next Friday August 5.

Update 7/22/11

2011-07-23T23:28:00.000-04:00

LULU Bullish Butterfly

LULU continued its move higher this week, adding a little profit to the unbalanced butterfly. I do not plan on adjusting this one unless it starts dropping quickly. Currently LULU has a profit of 50%.

KMX Put Seagull

KMX was flat this week but the profit dropped. It appears likely this trade will be a loser but I will wait one week prior to August expiration to close it. There is now a loss of 6% on this trade.

JOYG Call Seagull

JOYG continued moving higher this week but would have to reach 105 before I would take some profits. The move up dropped IV lower moving the current profit down by about half of what it was last week. Current profit is now 3%.

AAPL Put Seagull

I opened a new put seagull in AAPL the day after AAPL reported earnings. There is already a profit on this trade of 6% which mainly occurred because I opened the trade a few minutes after the opening bell, and IV ticked back up pretty quickly. My experience has been that in very active stocks like AAPL, many times the best entry time is very close to the open the day after earnings.

Update 7/15/11

2011-07-15T16:48:00.001-04:00

No new trades were made this week as the only viable candidate I found was Google, which is very expensive to trade. I expect to open new PCCRCs next week as earnings gets into full swing.

LULU Bullish Butterfly

LULU was basically flat this week but the butterfly made some theta decay gains. No adjustments were made, but there was a 2 for 1 split affecting the contracts owned, which is now twice as many 50, 55, and 60 strikes. The current profit is now +47%.

KMX Put Seagull

KMX moved lower every day this past week and is now very close to the strike price of the seagull which is at 32. Profit has dropped as well and currently shows a loss of 2%.

JOYG Call Seagull

JOYG was flat on the week as well up 6 cents from last Friday's close. IV moved up in JOYG giving a nice 7% profit on the week.

Update 7/8/11

2011-07-10T09:38:00.001-04:00

CTXS PCCRC

Friday was one week before expiration of the shorts on the CTXS PCCRC and I had to make a decision whether to roll to August or close the trade. With earnings coming up in a little more than 2 weeks I decided to take the small profit and close the trade. The other factor in the decision is earnings season is starting now and I expect some good PCCRC opportunities the next couple of weeks and would like to have as much capital for new positions. On Friday I closed the 5 remaining legs by selling 1 Sep 77.5 Put for 3.70 credit and selling 2 Sep 85 calls, 1 Sep 85 put, buying 1 Jul 85 call and 1 85 put for a credit of 10.90. Final tally on the trade was a profit of 12%.

TIF Call Seagull

TIF also was a the point of decision Friday and since it was losing money I also decided to close the position. Although TIF had moved 10 points higher during the trade, the drop in IV had more of an effect with the end result a 5% loss.

LULU Bullish Butterfly

LULU has continued to climb higher giving me some room in the body of the fly if it drops back some. It has an August expiration so I likely will not be changing or closing the position for a few more weeks. Unrealized profit is currently at 43%.

KMX Put Seagull

KMX has moved higher but the drop in IV has kept the position in losing territory. The shorts have an August expiration so there is some time for this one to work out. Currently the position has a loss of 1%.

JOYG Call Seagull

On Friday I opened a new Call Seagull in JOYG based on it being a high-flyer. The trade was Oct/Aug at the 95 strike for a 21.50 debit and 17 contracts. After a half day the position is showing a slight profit.

Update 7/1/11

2011-07-01T19:33:00.001-04:00

The VIX dropped quite a bit this week having a negative impact on the PCCRCs but a positive impact on the bullish butterfly.

CTXS PCCRC

CTXS continued to move up for the second straight week making the adjustment of 2 weeks ago (rolling the put down) look like the right trade. IV has fallen as CTXS has moved higher making the p/l drop some from last week and is now at +7%.

TIF Call Seagull

TIF moved to higher this week including a new high today at 79.58. I took some profits on the long calls by rolling 6 from the 70 to 75 strike for a 3.45 credit.With IV moving down there is a loss overall of 2%.

LULU Bullish Butterfly

The LULU trade has performed well so far thanks to LULU moving higher all week hitting 115.93 today. Currently there is a profit of 34%.

KMX Put Seagull

KMX moved higher this week with dropping IV also. No adjustments were made on KMX and it currently has a loss of 3%.

Update 6/24/11

2011-06-24T16:47:00.001-04:00

CTXS PCCRC

No trades were made to the CTXS PCCRC this week. CTXS was up a couple of points on the week, so the adjustment made last week was beneficial. Profit is down slightly to +9%.

TIF Call Seagull

TIF moved up a couple of points this week also. No adjustments were made and there is a profit on the position of 4%.

LULU Bullish Butterfly

LULU showed up as a high flyer candidate this week on my scan, however IV was over 40, the maximum for a PCCRC trade. I decided to open a bullish butterfly yesterday instead consisting of +6 Aug 100 Calls/-9 Aug 110 calls/+3 Aug 120 Calls for a $7.00 debit. The p/l is currently flat on the position.

KMX Put Seagull

KMX showed up this week as a potential PCCRC candidate. The day after earnings there was a negative skew between short and long options for a PCCRC in KMX of > 4%. So I checked the options again yesterday and the skew was a little better so I decided to open a Put Seagull. The trade was +51 Oct 32 Put/+17 Oct 32 Calls/-34 Aug 32 Puts for a 7.25 debit. The position is also flat after 1 day in the trade.

Update 6/17/11

2011-06-19T07:25:00.000-04:00

CTXS PCCRC

CTXS was down 4 of the 5 trading days last week despite the overall market being slightly higher. Late in the week I took some delta profits on the puts and set the trade up to continue to be profitable if there is a reversal to the upside. The trade was to roll one of the Sep 11 85 Puts to the 77.5 strike for a $5.00 credit. This trade also reduces the risk in the trade by more than 25%. The current profit on CTXS is 10% based on the original debit of $2035.

CSC Bearish Diagonal

On Tuesday I decided to close the CSC position rather than cover the long. The final tally was a 20% loss.

TIF Call Seagull

On Thursday I opened a new Call Seagull in TIF based on the high flyer criteria. A call seagull is synthetically equivalent to a PCCRC, in this case the call seagull trade was cheaper than the PCCRC. I discovered after the fact the the IV/SV ratio was a little too high on TIF (slightly over 1), but I will stay with the trade as it met all of the other criteria as a high flyer. The initial trade was +18 Nov 70 Calls, +6 Nov 70 Puts, -12 Jul 70 Calls for a $19.75 debit. TIF was up on Friday and the trade is currently showing a profit of 3%.

Update 6/10/11

2011-06-10T16:30:00.000-04:00

After the recent market downturn all of my diagonals other than the CSC bearish diagonal have been closed. I believe the best trades with this uncertain market will be PCCRCs, so I am currently looking to open new PCCRCs. It could be a little while before I find any PCCRCs though, as earnings season doesn't start until next month.

CTXS Bullish Diagonal

The CTXS bullish diagonal was closed on Monday rather than covering the position as the chart no longer looked bullish. Final tally on the trade was a 20% loss.

CTXS PCCRC

I rolled the shorts on the CTXS PCCRC from June to July today for a $3.10 credit. The two things I looked at were 1) was the trade profitable (yes), and 2) were the IVs higher in Jul (selling) than Jun (buying) (yes). The CTXS PCCRC currently has a profit of 6%.

CSC Bearish Diagonal

I uncovered the CSC bearish diagonal on Monday. I actually broke a rule on the trade in that the MACD was not down 2 days in a row with the 2 down days in the stock. But the stock was down 5 consecutive days yet somehow MACD was still green each day, so I decided to uncover. I paid $0.85 to buy back the Jun 37.5 puts. CSC is down 0.31 since that trade and overall there is a loss of 17%.

GES Bullish Diagonal

I closed the GES bullish diagonal on Wednesday after the p/l hit my stop-loss point. Final tally on this one was a loss of 49%.

GES PCCRC

The GES PCCRC failed the first test of rolling as the position was at a loss today when I made the rolling decision. So I closed the position today which ended with a loss of 10%.

Update 6/3/11

2011-06-03T22:06:00.000-04:00

CTXS Bullish Diagonal

CTXS was down a couple of points this week and the diagonal position remained uncovered.The CTXS diagonal is currently showing a loss of 9%.

CTXS PCCRC

There were no changes to the CTXS PCCRC trade this week. Next Friday I will either roll the shorts or close the position. Overall profit on the CTXS PCCRC is 14%.

CSC Bearish Diagonal

CSC was up Monday then down small amounts each day the rest of the week. There were no adjustments made and the position is still covered. Overall there is a loss of 22%.

GES Bullish Diagonal

GES was up the first 2 days this week then dropped the last 3 days. On Thursday I covered the long by selling 3 JUL 46 calls for 0.75. There is a loss on the position of 35%.

GES PCCRC

No trades were made in the GES PCCRC this week. Currently the position has a loss of 5%.

Update 5/27/11

2011-05-27T18:12:00.000-04:00

CTXS Bullish Diagonal

CTXS started the week down the first two days and on Tuesday I covered the longs by selling 2 Jun 87.5 calls for 0.85. CTXS was up the rest of the week and on Thursday I uncovered the position again by buying back those same 87.5 calls for 1.40. Profit on the CTXS diagonal position is 18%.

CTXS PCCRC

I did look at adjustments on the CTXS PCCRC but the underlying has not moved far enough to start locking in delta profits. CTXS will probably have to hit the mid 90s for an adjustment to make sense. Total profit on the CTXS PCCRC is 14%.

CSC Bearish Diagonal

I set up a bearish PCCRC indicator and CSC appeared on it this week. On Thursday I opened a new bearish diagonal in CSC buy buying 4 Sep 40/-4 Jun 35 diagonals for 4.50 debit. Ever since opening the position CSC has continuously moved up and today I rolled the short up to the 37.5 strike for a 0.43 credit. The chart of CSC still looks bearish so I am sticking with the trade unless a stop is hit. After 2 days there is a loss of 32%.

GES Bullish Diagonal

GES showed up on my PCCRC Spiker scan yesterday and I decided to make the same type trades as I have on CTXS. I will open a bullish diagonal and paper trade a PCCRC. The bullish diagonal is 3 Sep 41/-3 Jun 46 for 5.00 debit. Today I uncovered the position by buying back the short call for 0.80. After two days the profit is 1%.

GES PCCRC

I also opened the GES PCCRC paper trade yesterday. This was a 2/2/-1/-1 Sep/Jun PCCRC for 11.90 debit. The GES PCCRC is profit is 0%.

Update 5/20/11

2011-05-23T07:12:00.000-04:00

CTXS Bullish Diagonal

CTXS dropped on Monday, then went up each day the rest of the week finishing the week up about 1/2 point. On Thursday I uncovered the diagonal after 2 up days with MACD up.

Currently the CTXS diagonal has a profit of 3%.

CTXS PCCRC

There were no adjustments to the CTXS PCCRC position last week. The PCCRC shows a profit of 7% based on an original debit of $2435.

Update for 5/13/11

2011-05-17T10:22:00.000-04:00

I had a busy weekend and am a couple of days behind on this update.

CTXS Bullish Diagonal

No adjustments were made to the CTXS diagonal this week. The position currently has a loss of 3%.

CTXS PCCRC

I rolled the shorts in the PCCRC out a month at the same strike for a $4.00 credit. As of the close on Friday the PCCRC is showing a profit of 8%.

Update 5/6/11

2011-05-07T07:54:00.000-04:00

Most of my diagonals hit stops and were closed this week. Depending on what the market does here I will either open some new bullish diagonals and bearish diagonals.

NOV Bullish Diagonal

On Tuesday I decided to close NOV based on the NOV chart breaking through resistance. Final tally on the trade was a profit of 207%.

XLE Bullish Diagonal

On Friday I closed the XLE bullishj diagonal based on the chart and a stop being hit. Total profit on the trade was 296%.

UA Bullish Diagonal

For the same reasons I closed UA on Tuesday with the final profit at 116%.

CTXS Bullish Diagonal

CTXS was down the first three days of the week but then bounced back some on Thursday and Friday. On Tuesday I rolled the short calls out to June for a 0.75 credit as they had dropped to 20% of their initial value. There currently is a loss on the CTXS bullish diagonal of 13%.

CTXS PCCRC

The paper trade of the CTXS PCCRC has faired better than the bullish diagonal, which would be expected since the diagonal is a directional trade and the PCCRC is delta neutral and the stock has went down since the trade was initiated. There were no adjustments made to the PCCRC and the current profit is 2%.

Update 4/29/11

2011-05-02T14:29:00.000-04:00

Summary: Covered NOV then rolled shorts out and down, no change in XLE, rolled shorts down in UA, completely closed MHS, opened CTXS and plan to compare a diagonal in CTXS to a PCCRC in CTXS.

NOV Bullish Diagonal

NOV took a hit last Wednesday after an earnings miss and was down almost 3 points on the week. I covered NOV before earnings then rolled down the May 85 short calls out to June after they dropped quickly after earnings. Profit on the position is now at 348%.

XLE Bullish Diagonal

There were no trades in XLE this week and it remained uncovered. Profit is at 639%.

UA Bullish Diagonal

UA also had a big drop after earnings Tuesday and continued down later in the week. The shorts were rolled from the 85 strike to the 77.5 strike after the short was 20% of its initial value. Profit stands at 177%. If UA goes much lower I will be closing the position.

MHS Bearish Diagonal

MHS beat earnings estimates on Thursday and shot higher. I decided to close the position which had a 36% loss.

CTXS Bullish Diagonal

CTXS showed up on my PCCRC scan on Thursday. After looking through my results over the past several months I noticed that 75% of my PCCRCs went up in price (and were profitable). My diagonals have only gone the direction I design them 50% of the time. Matt is better at picking direction of stocks and has a 60-70% success rate. So I decided to screen for a trade using the PCCRC criteria but place a diagonal trade on it. Generally a successful PCCRC would gain more if traded as a diagonal if the stock moves up. Both are Vega, Delta, and Theta positive with the diagonal having more Delta and the PCCRC more Vega. For comparison on this trade I will paper trade a PCCRC at the same time. The diagonal was long 3 Sep 80 calls and short 3 May 90 calls for 9.10 debit right now this trade is down 2%.

The PCCRC is 2 contracts of the Sep/May 85 strikes for 24.35 debit. It is down 2% right now also.

Update 4/21/11

2011-04-22T13:06:00.000-04:00

NOV Bullish Diagonal

NOV dropped Monday and then was up 3 straight trading days after that and since it was already uncovered, no additional trades were made. I will cover NOV on Monday since earnings will be announced Tuesday. Profit is now 480% on the position.

XLE Bullish Diagonal

XLE had the same price pattern as NOV and also is still uncovered with no trades this week. Profit rose to 537% this week.

UA Bullish Diagonal

UA also had the same price action as NOV last week, but since it started the week covered, a trade was made Wednesday to uncover the position. 5 May 80 calls were bought for 3.20. Profit is now 351%.

MHS Bearish Diagonal

I have struggled with bearish oriented trades and MHS can be added to that list. MHS was up the first 3 days this week including a big up day on Tuesday. Thursday it fell back some which hopefully will continue next week. On Wednesday I rolled the short puts up a strike for a 30 cent credit. If MHS is down again Monday I will uncover the position. Currently there is a loss of 15%.

Update 4/15/11

2011-04-18T09:19:00.000-04:00

NOV Bullish Diagonal

After being down earlier in the week, NOV bounced back the last two days and I uncovered the long calls today by buying the May 87.5 for 0.60. Profit was down again this week and now stands at 349%.

XLE Bullish Diagonal

XLE had price action similar to NOV and on Tuesday I covered XLE by selling 5 May 80 calls for 0.65. Today I uncovered by buying those calls back for 0.86. Profit on XLE is 440%.

UA Bullish Diagonal

UA was fairly flat last week. I was able to roll the longs out on Tuesday and up a strike for a 0.05 credit. Profit is now 292%.

DECK Bullish Diagonal

I decided to close the DECK bullish diagonal on Monday. It was time to roll the long out as the number of days to expiration was approaching 60 yet the position was at a loss, so I did not want to add to a losing position. Finall tally on this DECK trade was a loss of 16%.

MHS Bearish Diagonal

I opened a bearish diagonal on MHS on Tuesday. The trade was long 3 Oct 62.5 puts, short 3 May 52.5 puts for a debit of 7.60. Currently the position has a loss of 1%.

Update 4/8/11

2011-04-08T16:37:00.000-04:00

NOV Bullish Diagonal

On Wednesday I covered the NOV position by selling 9 May 11 calls for 1.30. Overall profit was down this week and currently is 498%.

XLE Bullish Diagonal

No trades were made in XLE this week. Profit was down a little on the week to 640%.

UA Bullish Diagonal

On Thursday I covered the UA position selling 5 May 80 calls for 1.90. Profit was down this week on UA as well to 291%.

DECK Bullish Diagonal

DECK had no trades this week and remains uncovered. DECK was up on the week narrowing the loss to 10%.

Update 4/1/11

2011-04-02T11:34:00.000-04:00

I was on vacation most of last week but was able to make some trades. My accounts had all diagonals uncovered by the end of the week which led to some nice profits on Friday, especially on UA.

NOV Bullish Diagonal

NOV bounced around this week and finished flat for the week. I did have a signal to cover on Thursday but I was unable to make any trades that afternoon. NOV bounced back Friday so I left the long uncovered. Current profit on NOV is 574%.

XLE Bullish Diagonal

XLE was flat on the week also with a gain of 3 cents. No trades were made and the total gain on XLE is now 654%.

UA Bullish Diagonal

UA was the big winner this week especially Friday when it rose more than 5 points. I rolled the Jul 60 calls to the 65s and added another contract for 4.40 credit. Profit doubled on the week and now is 309%.

DECK Bullish Diagonal

DECK was up 4 points on the week although no trades were made. There currently is a loss of 20% on the DECK position.

Update for 3/25/11

2011-03-29T10:50:00.000-04:00

I was out of the country last week so I was unable to update the blog. This update is for after the close on Friday March 25.

NOV Bullish Diagonal

NOV dropped early last week but has been climbing ever since. On March 15 I rolled the short calls down to the 80 strike as the short delta had dropped by 0.2. Last Thursday I uncovered NOV after 2 up days with MACD up. Overall profit is now 609%.

XLE Bullish Diagonal

XLE was pretty flat 2 weeks ago and then rose last week. On Thursday the 24th I uncovered XLE by buying back the 6 Apr 81 calls for 55 cents. Then because my longs were less than 90 days to expiration I rolled them out from Jun to Sep for a 0.90 debit. On this roll I reduced the number of contracts from 6 to 5 to keep the debit close to 0. Ideally at the time of the long roll my delta would be above 0.80 enabling me to roll the same number or increase the number of contracts, but that didn't work out this time. Overall profit is now 570% on the XLE position.

UA Bullish Diagonal

UA dropped quite a bit 2 weeks ago, especially that Thursday and Friday, then last week was pretty flat. On Tuesday the 15th I covered UA after 2 down days by selling 3 Apr 70 calls for 2.10. I picked the 70s because it was the closest to the delta I was looking for, although I used a ratio to get to the delta ratio I wanted (3 shorts, 4 longs). With the continuing move down the short dropped to 20% of its initial value on 3/23/11, so I rolled out to the May 70 strike. I sold 4 of the May 70s for 1.51 as they were at the delta I was looking for. Then UA bounced enough that on 3/24/11 I uncovered the position by buying the May 70s back for 2.2 debit. Overall profit is now 146%.

DECK Bullish Diagonal

DECK's price followed the action of NOV and XLE the last 2 weeks, dropping 2 weeks ago and rising last week. On the 18th I rolled down from the 95 to 90 call for 0.42 credit when the short dropped to 20% of its initial value. DECK was uncovered on 3/24 by buying back the 90 calls for 0.80. Overall there is a loss of 34%.

Update 3/11/11

2011-03-11T17:40:00.001-05:00

Click to go to the VEGA Trading discussion forum on Insane Money

This was a bad week for the bullish diagonals, especially on Thursday with the big drop in the market. One thing to expect from them is there will be some big swings in profit/loss at times and it takes some patience to stick to the plan when things are swinging down. I did see Matt mention that on his blog recently and it is one of the hardest things to deal with when trading diagonals. Fortunately things bounced back some Friday making the week more tolerable.

NOV Bullish Diagonal

NOV went down the first 4 days of this week and on Wednesday I covered the longs by selling 9 Apr 85 calls for 1.60 credit. Technically on Thursday I could have rolled the shorts down as there was a 33% profit in 1-2 days, but the strike with the delta I needed to roll to was the 85, the same strike I already had sold. Fortunately NOV bounced up 2.30 points today. Profit was down on the week and now stands at 498%.

XLE Bullish Diagonal

XLE followed the same price pattern and on Tuesday I covered the position by selling 6 APR 81 calls for 0.92. Overall profit is currently 375%.

UA Bullish Diagonal

UA bucked the trend and was up 3 of the 5 days this week. There were no trades made so the position is still uncovered. Profit was up in this ticker this week and has now reached 213%.

DECK Bullish Diagonal

DECK was also up 3 of 5 days, but it was down about 3 points on the week, as the down days were bigger than the up ones. On Thursday I covered the longs by selling 2 Apr 95 calls for 1.30. There is currently a loss on the position of 27%.

Update 3/4/11

2011-03-04T20:05:00.000-05:00

Click to go to the VEGA Trading discussion forum on Insane Money

NOV Bullish Diagonal

NOV went down Monday and Tuesday, then reversed Wednesday and Thursday and with the 2 up days and 2 up MACD days my trigger was hit to uncover the position.

So late Thursday I bought back the 8 short APR 85 calls for 2.30. Since my longs were under 90 days to expiration I then rolled them out to August. I sold 11 May 75 calls and bought 9 Aug 75 calls for 0.89 debit. To hit my target delta of 0.65 to 0.7, I needed to roll to the same strike in August, which meant I could not keep the same number of contracts without a significant debit (adding risk to the position). I chose 9 contracts as it added less the $1.00 additional debit to the position. NOV fell again today but was up some on the week and profit is up to 681%.

XLE Bullish Diagonal

XLE continues in the upward channel it has followed since September this week and no new trades were made.

The trigger to cover would be 2 down days coupled with 2 down MACD days. Tuesday was down in price and MACD but Monday and Wednesday were up, so nothing has triggered yet. Friday was down also so if Monday confirms with a down day and MACD I will sell the appropriate Apr calls to cover the position. Profit was up some this week and stands at +548%.

UA Bullish Diagonal

UA's price and MACD was up last Friday and Monday they were up again so I uncovered the position by buying back the Apr 70 calls for 1.95. Then UA went 2 down Tuesday and Wednesday and they were coupled with MACD going down as well.

I was out of town Wednesday when this trigger hit and normally I would have covered the position near the close Wednesday. I did not want to make that trade from my phone since I could not see option deltas to verify the correct strikes to sell, so I decided to wait until the open Thursday to make the trade. UA gapped up Thursday and rose all day, so though I had a stop limit order to cover, it never filled. Today UA was higher as well, which would have given a signal to uncover again, which I didn't need to do as I was already uncovered. So it turned out to be good fortune that I was unable to make the covering trade on Wednesday as my profits would have been lower had I made that trade. Overall profit in UA is now 159%.

DECK Bullish Diagonal

DECK had a big 5% drop on Tuesday and the short call dropped to 20% of its initial value. So I rolled the short from Mar to Apr at the same strike for a 0.72 credit. The 100 strike was chosen to maintain a 0.4 delta difference with the long call. On Thursday and Friday DECK was up and MACD was up giving the trigger to uncover the position.

So late today I bought back the 2 Apr 100 calls for 1.30 debit. DECK is down 3 points since I opened the position giving a loss that is currently 10%.

Update 2/25/11

2011-02-25T16:43:00.000-05:00

Click to go to the VEGA Trading discussion forum on Insane Money

NOV Bullish Diagonal

I made two trades in NOV this week, which ended up the week down about 1 point. On Wednesday I covered the position by selling 11 Mar 85 calls for 1.23. On Thursday I rolled the short 11 Mar 85s out to 8 Apr 85s for a 6.25 credit. Overall profit is up to 623%.

XLE Bullish Diagonal

XLE is the only position I had that is still uncovered at the end of this week. I did add 2 longs on Tuesday, rolling the 4 Jun 70 calls to 6 Jun 74 calls for 0.10 debit. Profit was up this week and now stands at 526%.

UA Bullish Diagonal

UA was down about 1 3/4 this week and profit on the diagonal dropped somewhat. I rolled the shorts from Mar to Apr on Thursday for 0.95 credit. Profit is now 136%.

DECK Bullish Diagonal

I opened a new diagonal in DECK this week. DECK had a wild ride especially after earnings Thursday night. The position is long 2 Jun 85 calls and short 2 Mar 100 calls for a 10.47 debit. Currently there is a 4% loss on the position.

Update 2/18/11

2011-02-21T09:17:00.000-05:00

Click to go to the VEGA Trading discussion forum on Insane Money

NOV Bullish Diagonal

I made several trades on NOV this past week. On Wednesday I rolled the short Mar 80 calls up to Mar 85 calls for a 2.13 debit. This trade was to realign the delta difference between the long and short calls as it was less than 0.15 which risks delta inversion. On Thursday I bought those same Mar 85 calls back for 1.65 after NOV had moved higher 2 consecutive days. In order to buy them back I also had to sell 2 of my longs, the May 75 calls for 9.55. The current position is 11 May 75 calls for 3.00 debit and the overall profit is 614%.

XLE Bullish Diagonal

XLE moved higher last week and on Thursday I bought back the shorts for 2.10. I had to sell one long Jun 70 call for 7.85 to finance the purchase. Profit on the XLE position is now 448%.

UA Bullish Diagonal

On Tuesday I covered UA by selling 4 Mar 70 calls for 1.70. Overall profit at Friday's close is 151%.

Update 2/11/11

2011-02-11T19:39:00.001-05:00

Click to go to the VEGA Trading discussion forum on Insane Money

Nice week with the diagonals as they increased my accounts 9.5% this week.

NOV Bullish Diagonal

On Monday I rolled the NOV longs up and added 5 additional contracts. The trade was -8 May 65 Calls/+13 May 75 Calls for a 20.30 credit. Strictly following Matt's rules would have allowed me to add even more contracts, but I decided to reduce the overall risk instead. After the trade Monday NOV promptly fell the next 2 days so on Wednesday I sold 13 Mar 80 calls for 1.73 credit. Thursday NOV then rose over two points, then today it dropped 1.59 so it has been a roller coaster this week. Profit currently stands at 593%.

XLE Bullish Diagonal

XLE traded down on Tuesday and Wednesday and I covered the position by selling 5 Mar 76 calls for 0.71. Overall profit is now 360%.

UA Bullish Diagonal

UA moved up 10% this week and on Tuesday I was able to roll the long call up and add an additional contract for a 0.30 debit. Now I have 4 Jul 60 calls for around a 5 debit. Profit now stands at 196%.

Update 2/4/11

2011-02-04T17:58:00.001-05:00

Click to go to the VEGA Trading discussion forum on Insane Money

It has been busy the last couple of weeks with some travel in my day job so I missed updating the blog last week.

NOV Bullish Diagonal

NOV has gone up almost every day the last two weeks and posted good earnings yesterday. On Monday I rolled the longs up and added a couple of more contracts after the long delta hit 0.85. The trade was sell 6 May 11 60 calls, buy 8 May 11 65 calls for 0.60 credit. After earnings yesterday I bought back the short calls uncovering the position. NOV is now the best performing diagonal I have had with profits now standing at 603%.

XLE Bullish Diagonal

XLE has been chugging upward the last two weeks as well. Last week I rolled the longs up from the 63 strike to the 68 strike adding 2 contracts for a 0.10 credit. This week I rolled the longs up again from the 68 to the 70 strike for another 1.43 credit. Yesterday I bought back the 3 shorts for 3.65 to allow the long to run uncovered. Overall profit now stands at 408%.

UA Bullish Diagonal

UA had two adjustments last week. First I bought the 2 short 60 calls back for 1.30 on 1/27. On 1/28 I rolled the longs up and added another contract for a 1.65 debit. So the current position is 3 Jul 55 calls. UA was up 5% today giving the majority of the current 93% profit.

Update 1/21/11

2011-01-24T11:07:00.001-05:00

Click to go to the VEGA Trading discussion forum on Insane Money

Most of the gains from last week were given back this week when the market traded lower and now all positions are covered.

NOV Bullish Diagonal

After a couple of down days I covered NOV on Thursday by selling 4 Feb 70 calls for 1.90. I used a ratio, i.e. only sold 4 calls against 6 long calls as the delta of the option I sold was higher than I wanted. Profit is currently 311%.

FCX Bullish Diagonal

I made several trades in FCX last week after some significant down moves in the stock. On Tuesday I covered the longs by selling 2 Feb 125 calls for 2.96. On Thursday I rolled those calls down to the 119 strike after FCX gapped lower on earnings. The roll yielded a credit of 1.05. On Friday I decided to close the entire position after determining resistance was broken with no further resistance in sight as well as profit targets being hit. The closing trade was selling the May/Feb 105/119 diagonal 2 times for a 10.46 credit. This gave a final profit of 102%. I will be looking for a replacement position this week.

XLE Bullish Diagonal

On Thursday I covered XLE after 2 down days by selling 3 Feb 71 calls for 1.02. Profit on XLE is currently 313%.

UA Bullish Diagonal

On Thursday I also covered UA by selling 2 Feb 60 calls for 0.75. There is currently a loss on the position of

15%.

Update 1/14/11

2011-01-15T08:12:00.000-05:00

Click to go to the VEGA Trading discussion forum on Insane Money

It was a nice week for the diagonals this past week especially on Friday.

NOV Bullish Diagonal

NOV was a great example Friday of this diagonal trading strategy working. The position was up 95% in 1 day. In order to get returns like that, a couple of things have to happen. First, the position size (not risk) has to be increased by adding additional shares with credits. This can only be done when the underlying stock has moved in the direction of the diagonal position (up for a bullish trade in this case). The number of contracts in NOV has been tripled over the life of the trade- I started with 2 contracts and have worked up to 6 contracts at this point. Second, the diagonal has to be uncovered (the short call bought back leaving the long call naked). According to the rules I follow, I uncover a diagonal when the stock and MACD indicator have moved up 2 consecutive days. In NOV this occurred on Tuesday and I bought back the 6 Feb 70 calls for $1.52. Once you have a position setup like that and you get a move in the right direction in the underlying, you can have some nice profits occur. NOV was up $2.18 on Friday to 69.31 and the position is now up 385% overall.

FCX Bullish Diagonal

On Tuesday I uncovered FCX by buying back the 2 Feb 125 calls for $4.10. On Thursday I rolled the longs calls from the 99 to the 105 strike for a $4.35 credit. Overall the FCX position has a profit now of 177%. FCX has earnings on Thursday so I will be covering the long calls either Tuesday or Wednesday.

XLE Bullish Diagonal

No adjustments were made to XLE this week and the underlying was up 2.5 points on the week. Profit now is 342%.

UA Bullish Diagonal

On Friday I uncovered UA by buying back the 2 Feb 60 calls for $1.20. The position turned profitable this week and is up 12%.

Update 1/7/11

2011-01-07T18:01:00.000-05:00

Click to go to the VEGA Trading discussion forum on Insane Money

NOV Bullish Diagonal

NOV gapped up on Monday enabling me to roll the longs up and add a couple of contracts. NOV then proceeded to trade lower the rest of the week, and on Tuesday I covered the long calls by selling 6 Feb 70 calls for $1.75. Overall profit now is 218%.

FCX Bullish Diagonal

FCX followed the same pattern as NOV, gap up Monday then down the rest of the week. On Tuesday I covered NOV by selling 2 Feb 125 calls for 3.55. Overall profit is 189%.

XLE Bullish Diagonal

XLE alternated up and down days this week and ended near where it started the week. No trades were made with this sideways action and profit now is 248%.

CTRP Bearish Diagonal

CTRP was up strongly this week and I decided to close the position Tuesday after CTRP broke through resistance. Final profit on the trade was -61%.

UA Bullish Diagonal

I opened a new diagonal in UA today. The long was the Jul 50 calls and the short was the Feb 60 calls. The 7.25 debit position is down 5% after 1 day.

Update 12/31/10

2010-12-31T21:31:00.000-05:00

Click to go to the VEGA Trading discussion forum on Insane Money

Not much happened in the market between Christmas and New Year's, but I did make a few adjustments to my diagonal positions.

NOV Bullish Diagonal

NOV dropped the first two days of the week so I covered the long by selling 4 Feb 70 calls for $1.39. I could have used Jan options but there was not a Jan strike in the delta range I was looking at, so I went out to Feb instead. After the two down days, NOV went up 3 days in a row and I uncovered the long by buying back the 4 Feb 70 calls for $2.17 on Friday. Although I lost money on the short portion of the trade, I made money overall with NOV going up on the week as a diagonal is still a bullish position when "covered", just not as bullish as the long call when I am "uncovered". Overall profit is around 305%.

FCX Bullish Diagonal

FCX has been alternating up days then down days the last two weeks, so there has not been any adjustments to the current uncovered position. FCX was up on the week and overall profit now stands at 220%.

XLE Bullish Diagonal

XLE continued its uptrend last week to the point that on Monday I was able to roll the longs up and out for a slight debit. The 3 Mar 62 calls were sold and 3 Jun 63 calls were bought for a 0.45 debit. Profit overall on XLE is now 259%.

CTRP Bearish Diagonal

No adjustments were made to the CTRP position last week and CTRP was down on the week. Overall there is a loss on the position of 20%.

Update 12/24/10

2010-12-27T13:12:00.000-05:00

Click to go to the VEGA Trading discussion forum on Insane Money

I did make a few adjustments last week despite the low volume due to the holidays.

NOV Bullish Diagonal

No adjustments were made to the NOV position and overall profit is now +285%.

FCX Bullish Diagonal

I uncovered FCX on Wednesday by buying the Jan 11 119 Calls for 3.70. Overall profit is now +192%.

XLE Bullish Diagonal

On Tuesday I uncovered XLE by buying back the Jan 11 68 calls for 0.91. Overall profit is now +222%.

CTRP Bearish Diagonal

I covered CTRP on Tuesday by selling 2 Jan 11 40 Puts for 1.10. Overall the position is down 26%.

Update 12/17/10

2010-12-17T18:01:00.000-05:00

Click to go to the VEGA Trading discussion forum on Insane Money

The markets were slightly up this week although I had some whipsaw action on my diagonals which were down 1%. I have found that you have to be able to handle large swings of p/l with diagonals as the profit can swing widely from day to day.

NOV Bullish Diagonal

I made one trade on NOV this week uncovering the long Friday afternoon. The fill was $1.70 for buying back the 4 Jan 11 65 calls. Overall the profit stands at +223% on NOV.

FCX Bullish Diagonal

I covered FCX Wednesday afternoon by selling 2 Jan 11 120 Calls for $2.50. FCX has moved up since then closing at 113.70 today and profit on the diagonal is 160%. There was a dividend this week on FCX that lowered my strikes by $1.00, making me now hold the 119 and 99 strikes instead of 120 and 100.

XLE Bullish Diagonal

There were no trades on XLE this week and the position is still covered, i.e. a diagonal. Profit was up some finishing the week at +180% overall.

CTRP Bearish Diagonal

CTRP had a wild week this week, especially on Tuesday when it dropped about 15%.

Unfortunately the position was covered at that point so I did not get full advantage of the drop. I uncovered CTRP Tuesday afternoon and it has moved up since then closing today at 40.74. I have considered closing the position but for now it is still open and is showing a loss of 16%.

Update 12/10/10

2010-12-10T18:18:00.001-05:00

Click to go to the VEGA Trading discussion forum on Insane Money

Overall it was a flat week but I did make some adjustments during the week.

NOV Bullish Diagonal

After a couple of down days I covered NOV on Wednesday by selling 4 Jan 11 65 Calls for 1.58. The position was down a little this week with profit now standing at 200%.

FCX Bullish Diagonal

FCX had a good week and ended up about 4 points. There were no adjustments made to this position and the overall profit is 144%.

XLE Bullish Diagonal

XLE was flat this week but I did cover the long position after 2 down days. On Wednesday, I sold 3 Jan 11 68 calls for 0.77. Current profit stands at 168%.

CTRP Bearish Diagonal

I am not having much luck with bearish positions. CTRP was up about a point this week and on Tuesday I rolled the short puts up from the 40 strike to the 42.5 strike for 0.60 credit. The position is down 9 % overall.

Why I Don't Trade Stocks

2010-12-06T16:26:00.000-05:00

Most of my friends that are in the market trade stocks, not options. The popular misconception is that options are very risky. My belief is just the opposite, however, I believe stocks are more risky. Now that I trade options directionally, I think it is easier to show a direct comparison between the two trades, since stocks are always traded directionally.

On November 8, 2010, I want to buy DECK stock. The stock has been moving steadily up and my teenage daughter tells me all the kids want UGG boots (made by Deckers Outdoor Corp) for Christmas. Here is the daily chart for DECK:

I can purchase 200 shares of DECK at 62.67, for a cost of $12,534. The plan is to get out if there is a 10% drop in the stock, which would be at a price of 56, giving a loss of $1334. For the options trade, there are a couple of ways to do it. I could either use the same amount of capital as the stock trade ($12,534), or I could use the same amount of risk as the stock trade ($1334). These calculations would direct me to a different number of contracts to use since an options risk graph is not linear like a stock risk graph. I prefer to think in terms of controlling risk, so I will use the second option, and set up a trade with the same amount of risk at a 10% drop in stock price. For the options trade I will start with a diagonal spread, which is like a covered call but has a long call substituted for the stock. So on November 8 I buy the Mar 2011 55 call for 11.17 and sell the Dec 66.67 call for 1.92 to create my diagonal. To give me close to the same risk as the stock trade, I will do this with 4 contracts which makes my total cost $3700, about 30% of cost of the stock trade. Here is the first advantage of options over stocks: If DECK were to drop to 0 the next day, the stock trade loss would be over 3 times that of the option trade loss.

After a couple of days, DECK moves up, and I decide to adjust the options trade by buying back the short option I sold earlier. My plan is to only have a long call when the stock is running up, and "cover" the long call by selling a short call when the stock pulls back. The short call gives me some downside protection. On November 10 I buy back the short call for $1.35. There is not a similar corresponding trade I could make to the long stock position, so I continue to hold the 200 shares bought at 62.27.

For the next 6 days DECK trades lower, but never for 2 consecutive days, so I continue to hold the long call option purchased for 11.17.

On November 16 DECK starts moving up. It reaches 68 on November 22

and has risen enough that I can make an adjustment to my option position to capture some profit but still keep my position open. This is done by "rolling" my long call up a strike from 55 to 60 and also adding 2 additional options giving me a total of 6. I sell the 4 Mar 2011 55 Long calls for $15.10 and buy 6 Mar 2011 60 Long calls for $11.55. Normally I try to make this adjustment for a small credit but in this case the trade was a small debit, but I will try to do the next adjustment for a credit to balance this one out. So my options position now has 6 long calls instead of 4 that I started with for nearly the same risk I originally started with. This is the second advantage of options over a stock trade: When a trade is working I can make adjustments that increase the reward potential without increasing the risk. The only similar thing I could so with a stock position is to sell off some of the shares which decreases my risk, but also decreases my profit potential going forward.

DECK continues moving higher going up 9 straight days so on November 30

I am able to make another adjustment to the option position to capture more profits. I sell the 6 Mar 2011 60 Long calls for 19.28667 (these are actual trade prices, by the way, not paper trades), and I buy 8 Mar 2011 70 Long calls for 12.215.

DECK has continued to move up in December and closes today at 83.11.

DECK has been perfect for a long stock trade and the position is up 20.34 from the original purchase, a gain of 32% or $4088.

However, the stock gains are not even close to what the diagonal option position has gained.

Profit is currently at $10,030 on an original debit of $3700 or 271% profit for the option trade. Also with the credits I received on the adjustments the current debit is LOWER than the original debit and is $3330. This illustrates the third (main) advantage of options over stocks: The leverage of options allows for much larger gains than a stock position would give with lower risk.

Update 12/3/10

2010-12-03T20:00:00.001-05:00

Click to go to the VEGA Trading discussion forum on Insane Money

This week started slow but ended up strongly helping my bullish diagonal positions.

NOV Bullish Diagonal

After NOV moved down a couple of days I sold 4 Jan 11 65 calls for 1.75. I ended up getting whipsawed a little and bought the calls back today for 2.27. Overall the position is up 226%.

FCX Bullish Diagonal

Today I made an adjustment to the FCX position. I rolled the longs calls up and out and added an additional contract. I sold the Feb 90 call for 20.93 and bought 2 May 100 calls for 16.79 each. Normally I want to do this for a credit but because I only had 1 initial contract, I had to add a debit to the trade to double the number of contracts. Eventually when I roll again I will try to lower the basis back to what I started with by getting a credit. Overall the position is up 99%.

XLE Bullish Diagonal

XLE continued its move up this week and yesterday I was able to roll the call up and add a contract for a net credit. I sold 2 Mar 58 for 8.255 and bought 3 Mar 62 for 5.22 or a 0.85 net credit. Overall profit is now 179%.

LVS Bullish Diagonal

LVS traded down sharply on Thursday after some bad news. My stop was hit and I closed the position by selling the 3 Mar 45 calls for 7.60. Final profit on the trade was 88%.

CTRP Bearish Diagonal

I opened a new bearish diagonal in CTrip.com International today. I bought 2 Mar 50 Puts and sold 2 Jan 40 puts for 7.00 net debit. Currently the position has a loss of 3%.

Update 11/26/10

2010-11-29T07:44:00.002-05:00

Click to go to the VEGA Trading discussion forum on Insane Money

NOV Bullish Diagonal

There were no adjustments made to the NOV position this week, or any other position for that matter, with the Thanksgiving holiday. NOV closed the week at 61.52 and shows an overall profit of 210%.

FCX Bullish Diagonal

FCX closed the week at 97.93 and shows an overall profit of 25%.

XLE Bullish Diagonal

XLE closed the week at 62.41 and has an 81% profit.

LVS Bullish Diagonal

LVS closed at an even 50 dollars and has a 139% overall profit.

Weekly Update 11/19/10

2010-11-19T17:33:00.000-05:00

Click to go to the VEGA Trading discussion forum on Insane Money

The market was down early this week but recovered Thursday and Friday giving my bullish diagonals a 4% gain on the week.

NOV Bullish Diagonal

On 3 of the 5 trading days this week I made trades in NOV. On Monday, I covered the long by selling 3 Dec 60 calls after NOV was down 2 days in a row. When NOV recovered on Thursday, I rolled the longs up and out to the May 55 strike and also rolled the short up to the 65 strike. I was also able to increase the number of shares to 4 with these trades. Today I uncovered NOV by buying back the short calls. So the current position is 4 long May 55 calls with overall profit at 212%.

FCX Bullish Diagonal

I also made 3 trades in FCX this week. On Monday I covered the long by selling the Dec 110 long. After another move down Tuesday I rolled the short down to the 105 strike. Then today I uncovered the long by buying back the short 105 call. Overall profit is 52%.

XLE Bullish Diagonal

XLE followed the same pattern as FCX. Covered on Monday, rolled down on Tuesday, and uncovered today. Overall profit is 110%.

LVS Bullish Diagonal

LVS entered the week covered and on Wednesday I rolled the short down from 55 to the 50 strike. Then today I uncovered and bought back the short. Overall profit stands at 129%.

Weekly Update 11/12/10

2010-11-12T17:30:00.006-05:00

Click here to go to the VEGA Trading discussion forum on Insane Money

This week was good until today, when the market went down against all of my bullish diagonals. I am looking at some bearish positions also, but haven't found a good entry point yet. This week the accounts are down 4% giving back a little of the gains from the last couple of weeks.

RVBD PCCRC

I wanted to free up some cash for new positions this week, so I ended up closing all of my PCCRCs. I plan to stick to diagonals for a while, but I could return to the PCCRC trade in the future. I closed the RVBD position on Thursday, and the final tally was a gain of 25% of the initial debit.

COH PCCRC

I also closed COH on Thursday and the overall profit on the position was 5%.

SOHU PCCRC

SOHU was closed on Monday netting 11% profit.

NOV Bullish Diagonal

No adjustments were made to the NOV diagonal this week, although I will be covering the long Monday if NOV is down again. Despite NOV closing today down 3% to 57.65, overall the position is up 178%.

FCX Bullish Diagonal

FCX is still uncovered with no adjustments this week. FCX will also be covered Monday if it is down again. Overall P/L is close to where it ended last week, +68%.

XLE Bullish Diagonal

XLE also had no adjustments this week and ended today at 62.87. It will also be covered Monday if down again. Overall profit is currently 108%.

LVS Bullish Diagonal

On Wednesday I covered LVS after 2 down days in a row by selling 3 Dec 55 Calls for 1.75. Today LVS closed at 48.52 and the total profit is 131%.

Weekly Update 11/5/10

2010-11-05T17:26:00.000-04:00

Another good week this week with an overall gain of 18%. I may need to rename this blog from VEGA Trading to Diagonal Trading, as the diagonals are smoking the PCCRCs, and I am becoming sold on the diagonals being the best way to grow an account. My PCCRCs have a ROI of 6.2% this year while the diagonals have a ROI of 84% while requiring about 1/3 the debit of the average PCCRC.

PCCRCs

Since I made no adjustments or new PCCRC trades this week, I will not list any individual risk graphs. Next Friday will be adjustment determination day for the PCCRCs.

RVBD had a small gain on the week with overall profit now at 21% and RVBD at 59.28.

COH was stagnant still showing a 4% profit while closing at 52.92.

SOHU closed at 74.05 and also shows a gain of 4%.

NOV Bullish Diagonal

I still have uncovered longs in NOV although I did take some delta profits this week by rolling from the 47 to 50 strike. NOV closed the week at 58.77 and total profit stands at 204%. No, that number is not annualized, which would be ~ 2100%.

FCX Bullish Diagonal

FCX moved up and I rolled the long call out to Feb and up to the 90 strike. FCX closed the week at 104.84 and profit is now 71%.

XLE Bullish Diagonal

XLE also moved up this week causing me to uncover the longs by buying back the shorts on Tuesday. I also rolled the longs out to Mar and up to the 58 strike. I am trying to position my longs 4-6 months out right now which is Feb, Mar, or Apr expiration months. XLE closed the week at 62.31 and the position is up 88%.

PNC Bearish Diagonal

PNC traded up the last three days of this week to the point where I felt the bearish pattern was broken. I closed the position out today for a 46% loss.

LVS Bullish Diagonal

LVS chugged higher again this week and I was able to roll the long calls up from the 40 to 45 strike. LVS closed today at 51.98 and is showing a profit of 186%.

Weekly Update 10/29/10

2010-10-29T17:06:00.000-04:00

This was a good week of trading with my account values up 6% on the week. I opened new PCCRCs in SOHU and COH and made several adjustment to the diagonal trades.

RVBD PCCRC

On Monday I captured some delta profits on RVBD by rolling 2 of the long calls from the 55 to 60 strike. RVBD ended up higher on the week closing at 57.59. Overall profit on the position stands at 19% despite a 4% loss today.

COH PCCRC

COH appeared on the screener Tuesday and I opened a new PCCRC at the 50 strike. COH closed dead on 50 today and despite IV dropping a lot the position currently is showing a 4% profit.

SOHU PCCRC

I also opened a PCCRC in SOHU on Tuesday. It reported earnings on Monday but did not show up on the screener because average volume is a little less than 1M. The parameters still looked good on Tuesday so I opened a new position at the 75 strike. The stock is down about 1/2 point from when I made the trade but there is still a 2% profit.

NOV Bullish Diagonal

NOV reported earnings on Tuesday and the stock jumped 4 points. I rolled the longs up and out to the Feb 47 strike and I also rolled the shorts up and out to Dec 55. On Wednesday I uncovered the long call by buying back the short after 2 up days in NOV. NOV closed the week at 53.76 and current overall profit is 84%.

FCX Bullish Diagonal

On Tuesday I uncovered the long on FCX after 2 up days. It has went down 3+ points since then and now profit stands at 2%.

XLE Bullish Diagonal

XLE dropped on Wednesday and Thursday so I sold two calls to cover the 2 longs. Since there was not an option with the delta I was looking for, I sold 2 different strikes, the 60 and 61. XLE moved up slightly today to 59.24 and profit on the position stands at 19%.

PNC Bearish Diagonal

PNC has been more bullish than bearish lately, but it did go down on Wednesday and Thursday so I bought back the short. PNC was back up again today and closed at 53.90. There is a loss overall on the position of 8%.

LVS Bullish Diagonal

LVS reported earnings Wednesday night and gapped higher Thursday. I rolled the longs up and out to Mar 40 while adding a contract and uncovered the longs by buying back the shorts after the 2 up days. LVS ended the week at 45.88 and shows a profit of 43%.

Weekly Update 10/22/10

2010-10-22T16:54:00.000-04:00

I made 9 trades this week including opening new positions in LVS and RVBD.

RVBD PCCRC

Today RVBD appeared on my PCCRC screener after beating earnings estimates and rising 18%. I opened a Nov/Jan 55 PCCRC for 12.55 debit when RVBD was at 52.58. RVBD closed today at 54.27 and the position is up 9%.

NOV Bullish Diagonal

On Tuesday I covered the long position in NOV by selling a November 50 Call for 0.80 (it is confusing to trade November options in NOV because the abbreviations are the same). So currently the position is +3Jan 40 C/-3Nov 50 C for 3.71 debit. Overall profit is at 34%.

FCX Bullish Diagonal

I rolled the short call down in the FCX diagonal Tuesday after FCX moved down quickly capturing some profit on the sold call. The current overall profit is 7%.

XLE Bullish Diagonal

The XLE diagonal position (it is currently a long call since I uncovered the long) has done well. I rolled the long call up and doubled the number of longs on Monday (see twitter Trade Updates above). Currently the overall profit is 28%.

PNC Bearish Diagonal

The PNC position moved against me all week and I made two trades in response. On Tuesday I covered the long by selling the Nov 50 put. Then on Thursday I rolled the put up to the 52.5 strike. Currently the position has a loss of 14%.

LVS Bullish Diagonal

I opened a new bullish diagonal in LVS on Monday. LVS moved down quickly so I captured some profit on the short call by rolling from the 42 to the 40 strike on Tuesday. LVS recovered some later in the week but still has an overall loss which is at -3%.

Weekly Update 10/15/10

2010-10-15T17:43:00.002-04:00

Here are the updates for my open trades for the last 2 weeks:

CTXS Call Seagull

The CTXS position was closed on 10/8 with the shorts getting close to expiration and earnings shortly afterward. Final P/L on the position was +50.8%, the second best PCCRC I have ever had.

INFA Call Seagull

INFA was also closed on 10/8 with a net profit of +32.2%.

INTU Put Seagull

INTU was closed on 10/6 with a net profit of +6.8%.

NOV Bullish Diagonal

I bought back the 2 short calls on NOV on 10/7 with NOV appearing to be moving higher. It did move up trading to 48.62 yesterday where I rolled up to the 44 strike and added a third call. Current position is 3 Jan 2011 44 Calls and profit stands at +47%.

XLE Bullish Diagonal

XLE appeared to be moving higher so on 10/7 I bought back the short call to let the long call run naked. My analysis shows if XLE reaches 60 I should be able to double the number of longs without adding any risk by rolling to the 56 strike. XLE is at 59.21 today and the XLE position is up 30%.

MOS Bearish Diagonal

I am not sure what made me think the MOS chart looked bearish. After a couple of days in the position the chart looked bullish and the stock acted bullish so I closed the position on 10/8 after a gap up. Total P/L was -21.1%.

FCX Bullish Diagonal

I opened a new position on FCX on 10/8 by buying the Jan 85 call. I decided to cover the call today because earnings are due out next week. Current profit on the total FCX position is +22%.

GOOG showed up on the PCCRC screener today but I did not open a position because of the high cost. I expect to open some PCCRCs in the next couple of weeks.

Blog Reopened

2010-10-04T12:34:00.001-04:00

I had closed this blog a few months back due to lack of time to keep it updated. However, with some new features in ThinkOrSwim's MyTrade, I believe I can update the blog much more easily now, so I have decided to reopen VEGA Trading. The way it works is when I make a trade in ThinkOrSwim (TOS), I can make the trade available to my Twitter account via MyTrade in TOS. I can also have all tweets from Twitter get posted automatically to this blog. So I can post my trades from TOS to here automatically through Twitter. The format will be alot different, but the information should all be there. Let me know via comments if you find the new format useful.

Right now I am focusing on two types of trades: PCCRCs and Diagonals. I have some Iron Condors open still but I am not planning on continuing to trade them. My current PCCRCs will be getting closed this week but I anticipate new ones opening over the next several weeks as earnings are announced. Below are my current positions, but again future updates will be in a much different format.

CTXS Call Seagull

The call seagull is another form of the PCCRC, with different options but nearly identical characteristics. I have rolled the long calls in this one a few times as CTXS has moved up resulting in the U shaped risk graph shown below. Right now this is my second best performing PCCRC ever, with a profit of 45% (click on the picture below to make it larger).

INFA Call Seagull

INFA is similar to CTXS, a call seagull that has moved up with me rolling the long calls to capture some profit. The current profit is +38%.

INTU Put Seagull

INTU is a put seagull that has stayed closer to the initial price I opened it at. I did roll the long call up one strike so far. I choose between PCCRCs, Call and Put Seagulls based on which trade is cheaper at the time I am opening it. Currently the INTU position is up 9%.

NOV Bullish Diagonal

This position was opened last Thursday and currently is showing a loss of 8%.

XLE Bullish Diagonal

This one was also opened last Thursday and is down 3%.

MOS Bearish Diagonal

MOS opened last Thursday as well and with the down move of the market today is up 1%.

Update for 6/21/10

2010-06-21T17:26:00.000-04:00

BIDU (June)

BIDU dropped back down to the 70-75 range last Thursday and went it appeared it was going back over 75, I took the positions off that had any value. The final tally on the trade was about a 20% gain.

NTAP PCCRC

No changes in the last week to NTAP although the p/l has taken a hit. Currently it is near breakeven.

BIDU Diagonal

I am still bullish on BIDU so Friday I opened a diagonal. The trade was long the Sep 62 and short the Jul 80 for 13.97 debit. With BIDU going up 2 points today, the position shows a 9% profit.

IWM

I also plan to enter a diagonal in IWM. Today I opened the long portion by buying the Sep5 59 call for 9.09. I plan to sell a short Jul call later, hopefully after IWM goes up some.

Update for 6/16/10

2010-06-17T09:06:00.000-04:00

XEC

I closed the XEC position Wednesday as the 65 and 70 calls were hitting 100 deltas and I was pretty much maxed out on the profit I could make. Also the 85 call could still be in play if I waited and XEC shot up in the last two days of this expiration. I closed the position with two vertical trades for a 4.80 credit which netted a 52% profit overall (based on a max risk of $500).

BIDU

BIDU has been in a danger zone most of the week but I have not changed the position yet. I am looking at closing the options that have value today especially if BIDU goes back up above 75.

NTAP PCCRC

NTAP is still doing ok and I plan no adjustments in the near future. Profit at this point stands at 3%.

Update 6/11/10

2010-06-11T16:33:00.002-04:00

XEC

I made two trades to transform the XEC position into a condor. On Wednesday I bought the 70/75 vertical for 3.60 and on Thursday I sold the 80/85 vertical for 1.08 giving me a 65/70/85/90 condor for 2.20. I considered scalping the 70/75 vertical Thursday which could have netted me an additional 0.30 credit, but since XEC was still in the area of the risk graph between the two flies, I would start losing some of my profit because of the negative theta. The new position has a positive theta and probably will not be adjusted again.

BIDU

I also adjusted BIDU into a condor but it is not nearly as wide as the XEC condor. It also has an extra OTM call and put which could be useful if I need to roll up or down. On Wednesday I scalped a -80/+3 75/-2 70 put BWB for 0.30 by buying for 2.80 and selling the same spread for 3.10. Then Thursday I added a 70/-75/-80 call spread for 2.25 debit and bought a 70/75 put vertical for 2.45 debit. The overall position is essentially a 65/70/75/80 condor 2 times with an extra 85 call and 60 put for a 6.80 net debit. BIDU closed nearly centered in the condor at 72.75 and the position has finally reached breakeven.

NTAP

I rolled the NTAP short options on Thursday when NTAP was near 38 giving me a 2.10 credit in going from June to July at the 38 strike. NTAP approached 40 today and the position shows a 3% profit.

Update 6/8/10

2010-06-08T16:49:00.002-04:00

CTXS PCCRC

CTXS dropped lower today with an increase in IV and my sell order at 0.05 on the short call filled. Since the underlying was moving away from the short strike at 50, and to roll the short put would only give me about 0.20 credit, I decided to close the entire position when CTXS approached 40. I bought the Jun 50 put back for 9.50 and sold the 2 Sep 50 straddles for 10.58 cr. The final tally on this trade was a profit of 8%. It is interesting that so far I only have 44% winners but a 39% profit. This is because the winners have averaged 22% gain while the losers average only a 6% loss, which is the beauty of the PCCRC, low risk, unlimited reward type of trade. Unfortunately in this high IV environment there are few if any new candidates.

BIDU

When BIDU appeared to be moving higher at the open, I bought the +75/-2 70/+60 put bwb for 0.75dr. This morphed the position into more of a condor between 70 and 75. BIDU moved lower after the trade but closed at 70.49.

No adjustments were made to NTAP and XEC.

Update 6/7/10

2010-06-08T09:30:00.002-04:00

XEC

XEC moved up most of the day Monday and I put a trailstop order on the vertical I bought on Friday once I was up 25 cents. I ended up getting a 0.30 scalp on the vertical putting me back to the 2 flies at 70 and 85 now for a 0.32 credit. Plan to look at similar trades Tuesday if we get down near 75 or up to 80. According to the risk graph, I don't have to do anything about the 75-80 range until early next week when I will start seeing some losses in that area.

BIDU

This one seems to be going the wrong direction. Bidu traded in a pretty narrow range Monday, slightly down from Friday's close. I thought I would be doing nothing, but then near the end of the day it traded down further breaking 70. I ended up selling another ladder this time the call -70/+75/+80 for $1.50 cr. My thinking was this trade gets me closer to delta neutral and allows me to sell the ATM 70 call and buy OTM calls. The net result is +65/-2 70/+2 80/+85 calls and +65/+2 70/-3 75/+80 puts for 1.65 net debit. The short 75 puts are starting to worry me here. If we go down further I can scalp the call ladder (or vertical) I sold Monday, but after that trade I will be in a very delta positive position. If we go back up Tuesday, I can look at buying back the put ladder (or vertical), but it will take a big move for that to be profitable. My short theta is a bit high- if we sit still the position will be hurt also.

NTAP & CTXS PCCRCs

I have an order to close the short call in CTXS at 0.05, but other than that I doubt I will adjust these 2 before Friday. If CTXS does not go up a lot this week I may completely close the position rather than rolling for 0.20.

Update 6/4/10

2010-06-04T22:20:00.000-04:00

XEC

I made a few adjustments to the XEC position this week and it is performing the best of my open positions right now. On Tuesday, XEC moved higher and I put a trailstop order on one of the extra 80 calls. I ended up getting filled at 1.45cr. On Wednesday I sold a -80/+85/+90 call ladder for 1.30cr. On Thursday I consoldated everything into 2 butterflies for a small net credit by selling a +80/-3 85 call ratio for even, and then buying the embedded 70/75 call vertical for 3.60dr, giving me a 65/70/75 and 80/85/90 fly for 0.02 net credit. Today I didn't plan on making a trade but ended up with a small nudge against the XEC drop by buying an 80/85 vertical for 0.90dr giving me a net debit of 0.88 for the 2 flies and extra vertical. If XEC bounces higher next week I will either close the vertical or buy the other side giving me a second 85 fly. Current profit is around 30% of the average margin.

NTAP PCCRC

NTAP ended up down this week closing at 37.88. It is close enough to the short strike to give me a small profit. No adjustments will be made until late next week.

BIDU

BIDU is a little out of control, with 4 trades I have a condor, butterfly, extra call and extra ladder. On Tuesday I bought a 70/75/80 call fly for 1.10dr. Wednesday I sold a 75/80/85 ladder for 1.50cr. On Thursday I sold a 70/80 put vertical for 4.25cr. That gave me the fky, condor and extra call. Today I took a small bet against the fall in BIDU selling the 75/70/65 put ladder for 1.35 cr. The resultant position is +65c/+65p/-70c/+2 70p/-75c/-3 75p/+80c/+85p/+85c for 3.25 net debit and the risk graph is shown below.

CTXS PCCRC

No changes to the CTXS position even though it lost some money this week.

Update 5/28/10

2010-05-28T16:41:00.000-04:00

XEC

The XEC position became profitable this week and I made a few adjustments. On Wednesday I sold a 70/75 call vertical for 1.76dr and ended up buying the same spread back for 1.48dr later in the day. On Thursday I sold a 70/75/80 ladder (-1 70/+1 75/+1 80) for 1.60cr. The ladder could have been scalped on a move down, while the upside was still bolstered by the extra 80 calls. Then today when XEC moved up towards 75, I sold off one of the 80 calls for 0.90. So the current position is +1 65/-3 70/+2 75/+2 80 calls for 0.87 net credit. The position shows a current profit of 18%.

NTAP PCCRC

I was surprised to find a PCCRC candidate on my screener yesterday, NTAP, which rose over 18% after earnings. I was a little late to the game, but I opened a PCCRC in NTAP yesterday at the 38 strike using Sep/Jun options for 10.75dr. NTAP was down with the market today and the position lost 3%.

TPX PCCRC

I decided to close the TPX PCCRC today as it neared the 30% profit mark on fears of an IV drop. The long IVs were in the 50s so I caved in a few cents to close the position. Final profit was 28%.

BIDU

The BIDU position was adjusted on Wednesday with a 40 cent scalp of the 60 put, buying on the gap up in the morning and selling the put later in the day. On Thursday I bought a 70/75 put vertical for 2.60dr. So the current position is +1 65c/-1 70c/-2 70p/+2 75p for 8.05 net debit. Currently profit stands flat at 0%.

CTXS PCCRC

The CTXS PCCRC lost half of its profit on Thursday when the market moved up and IV fell. Some of that was gained back today and the current overall profit is 8%.

Update 5/25/10

2010-05-25T16:51:00.000-04:00

XEC

I sold the 55/60 put vertical today for 1.25cr bringing the cost of the position down another 19 cents. The current position is a 65/70/75 call butterfly with 2 extra 80 calls for 1.91dr. After XEC rose to 66 the position closed with an overall loss of 17%.

TPX PCCRC

There have been no adjustments this week to the TPX position and there is nothing showing up on my PCCRC screens with IV so high. The current p/l is 27%.

BIDU

I have made a few trades around the core BIDU butterfly starting Monday by selling the 75/80 call vertical for 1.60cr. Later in the day I was able to buy the same vertical back for 1.40dr, reducing the debit on the fly to 1.05. Today I bought a 70/75 call vertical when BIDU gapped lower. Then when the market recovered late in the day, I had the opportunity to pick up another 20 cent scalp, but rather than make another day-trade by selling the same call vertical, I instead bought the equivalent 70/75 put vertical for 3.10. This gave me an iron butterfly for 5.85dr which is equivalent to the original call fly I had for 0.85. With these trades this position turned profitable today and is up 11% overall.

CTXS PCCRC

There also have been no adjustments to the CTXS PCCRC and currently the position shows a 15% profit.

Update 5/21/10

2010-05-22T08:44:00.003-04:00

WHR PCCRC

I closed the WHR position Thursday afternoon after the profit level hit 30%. I looked at rolling on the put side to lock in delta profit but the risk graph of the roll would have been worse than the existing graph in most places. I decided to take the Vega profits with the spike in VIX and long IV approaching 50%. Right now it looks like a smart move as the position would have lost about 5% on Friday. Final p/l was +32%.

XEC

I have tried some adjustments to the XEC position starting on Wednesday when I bought another Jun 80 call for 0.45 giving me +65C/-2 70C/+75C +2 80C. XEC continued lower Wednesday and Thursday and I bought a Jun 55 Put Thurs for 1.20. A few hours later I sold that put for a 0.20 scalp and when XEC rose some at the end of the day Thurs I bought the same Jun 55 Put for 1.20. XEC gapped down Friday enabling me to sell the put for 1.70, putting me back into the position above. I decided to get closer to delta neutral for the weekend and bought a Jun 55/60 Put spread for 1.06 debit Friday afternoon giving me a position of +65C/-2 70C/+75C +60P/-55P for 3.16 debit. Current profit stands at -36%. The plan is to scalp the 80 calls on a rise in XEC and sell the put spread on a gap down.

BIDU

I also made some trades on BIDU buying a 65/70/80 broken wing butterfly for 0.35 cr on Wednesday as BIDU continued to fall away from my vertical. This gave me a 65/70/75 butterfly as a result. Then when BIDU went down further I bought an 85 call on Thursday for 0.70 and sold it near the close on Friday for 0.85. I could have gotten more for the scalp had I sold it earlier on Friday. So the net results is a 65/70/75 fly for 1.25 dr. Current profit is -23%.

TPX PCCRC

I tried to close the TPX PCCRC for a 30% gain this week but did not get filled. IV of the longs now sits at 54-55%, so I will continue to try to close this one next week if possible. Current P/L is 26%.

CTXS PCCRC

No adjustments were made to CTXS as the long IV is not as high as the other PCCRCs at 41%. Current P/L is 21%.

PCCRCs rolled to June

2010-05-18T16:56:00.000-04:00

XEC Bullish Fly

I have not made any adjustments to the XEC position this week, although I have come close a couple of times. It is losing money, but it is a low risk position. Current P/l is -34%.

TPX PCCRC

I rolled the short May straddle to June today for a 2.28 credit. The position was up today and current p/l is 21%.

WHR PCCRC

I rolled the short WHR straddle yesterday for a 4.70 credit. The position is currently up 24% despite WHR having fallen 10 points from when the position opened.

BIDU Fly

I still am holding the vertical in the BIDU fly, and looking for a good adjustment point. Current profit is -17%.

CTXS PCCRC

I adjusted the CTXS PCCRC yesterday rolling the May straddle to June for a 1.33 credit. Currently p/l is at 13%.

Weekly Update 5/14/10

2010-05-15T08:26:00.001-04:00

Most of this week was quiet trade-wise, although I did add a couple of new positions Thursday and Friday.

XEC Fly

I had looked at XEC as a PCCRC candidate, but like most stocks right now IV is too high for a PCCRC. I decided instead to do a bullish butterfly trade. The first leg I opened was a 75/80 call vertical for $1.50 on Thursday. The initial plan was to sell the other vertical if XEC climbed higher to get into the butterfly at a lower cost. Thursday XEC did not bounce up so I ended the day with just the long call vertical.

Friday XEC dropped further with the market and I decided I needed to make an adjustment when XEC broke below 70. I looked at several adjustments, but with the drop in price the 85/85 vertical was out of the question. I decided the best adjustment would be to add a 65/70/80 BWB, giving me a fly at the money.

I had the core position and then decided to add an OTM long call to give me a bullish bias again and to see if I could scalp it Monday and lower the cost of the position. I put in a limit order to buy the 80 call for 0.90 and it eventually filled giving me a 65/70/75 fly with an extra 80 call.

By the end of the day Friday XEC had bounced a little giving me some profit on the long 80 call. Monday I will look for an opportunity to sell the call for 0.30 or so profit. Overall the position shows a loss of 14%.

TPX PCCRC

No adjustments were made to the TPX position this week, and like all the PCCRCs it showed a profit on the week. Normally I would have rolled the short options on Friday, but with the inflated IV I decided to take the weekend theta and roll early next week. Currently the p/l stands at 21%.

WHR PCCRC

The WHR PCCRC has done well this week also but is off from earlier profit totals and currently is up 17%. I will adjust this one as well early next week.

BIDU Fly

BIDU was another PCCRC candidate that was too expensive after earnings and now has too high an IV for a PCCRC, so I looked at opening a bullish butterfly on Friday after BIDU dropped in the morning. I started with a 75/80 call vertical which was filled at 1.75 dr. BIDU did go a little higher later in the day giving me some profit, but I have not added the other half of the fly at this point. Monday I will likely do that to get to a more neutral position. Current profit stands at 7%.

CTXS PCCRC

The CTXS position is doing well and will be rolled to JUN early next week. Current profit is 14%.

Weekly Update 5/8/10

2010-05-08T09:27:00.000-04:00

RUT IC

Friday I gave the market a little time to settle out but after the initial drop, recovery, and second drop below the short put strike I decided to adjust the position. I could have increased the risk and stayed in the trade but with the current market conditions I was not comfortable with a short put at 620, even with 14 days to expiration. So I closed the entire position and took the loss.

OEX IC

Similar story on the OEX, I waited while OEX rose to 515, but when it went back below the short put strike at 510, I closed the position for a loss.

WHR PCCRC

The PCCRCs did well again Friday, with the WHR position gaining 1% and is up 16% overall.

TPX PCCRC

The TPX PCCRC was flat Friday and is up 9% overall.

CTXS PCCRC

The CTXS position was up 6% Friday and is up 14% overall.

Today's Profit: $10 Million

2010-05-06T20:00:00.001-04:00

That is intraday profit, as when the quotes went crazy at 2:40 my RUT IC position was showing a daily p/l of -$10,000,000. So when it was fixed my account went up by $10M. Crazy day.

RUT IC

I made an adjustment to the RUT IC today before the market completely tanked. The short puts were rolled to 660 and the short calls to 750 and now I have 3 contracts on each side. This one is scary with the market action and bid/ask spread, if I can get a decent price I may try to get out if I can tomorrow. Position was down 11% today and 16% overall.

OEX IC

I looked at closing this one when OEX hit 510, but the spread widened and I ended up deciding to wait. Who knows what will happen tomorrow but it will close one way or another. It will see some serious theta decay tomorrow. Current p/l is at -43%.

WHR PCCRC

Too bad I wasn't all in PCCRCs today as they did great with the IV jump. WHR gained 4% and is up 15% overall. I may try to lock in some put games tomorrow.

TPX PCCRC

The TPX PCCRC was up 3% today and is up 9% overall.

CTXS PCCRC

The CTXS PCCRC was down 1% today but is up 8% overall and the risk graph is now entirely above 0.

New 2.5 Day OEX Iron Condor

2010-05-05T23:57:00.000-04:00

OEX IC

I opened a new OEX IC today with OEX near 532. The short strikes are at 550 and 510. Although the P/L is currently negative, the condor is fairly centered with 2 days to expiration and a 89% chance of expiring in the profit zone.

RUT IC

The RUT IC is inching towards profitability and at the current price of 698.58, would reach it next Monday. It would get there sooner if IV drops back down. The position lost 0.5% today and is down 4% overall.

WHR PCCRC

The PCCRCs have done well this week with the rise in volatility. WHR leads the three and is now up 12% overall in 10 days. The entire risk graph is now above the zero line despite WHR dropping 10 points since the position was opened.

TPX PCCRC

The TPX PCCRC is doing fairly well, despite the fact IV was really too high and IV skew was around 4% when I opened it. Today it was up 3%, and overall it is up 6%.

CTXS PCCRC

The CTXS PCCRC was up 3% today and has gained 8% overall. Again these are VEGA gains as the underlying has dropped to 46 since I opened the position near 50.

Update 4/30/10

2010-05-01T00:23:00.000-04:00

OEX 3.5 Day IC

The OEX IC got a little close yesterday when OEX hit 550, but it backed off today giving the full 6% profit.

WHR PCCRC

The WHR position did well this week despite WHR closing down at 108.87. This one is up 6% this week.

TPX PCCRC

TPX was also down with the rest of the market and the position is flat on the week.

CTXS PCCRC

CTXS was down to 47.03 but the position was up 2.5% on the week.

New 3.5 Day OEX Iron Condor

2010-04-28T07:45:00.002-04:00

OEX IC

I opened a new 520/525/555/560 iron condor in the OEX weeklys yesterday for 0.30 credit. It was down yesterday after the late afternoon selloff but it is still near the middle of the range. the jump in VIX allowed me to go farther out with the strikes.

The 3 PCCRCs were fairly flat yesterday with the delta losses cancelling out the Vega gains.

New PCCRC in Whirlpool, Tempur-Pedic, and Citrix

2010-04-26T20:25:00.000-04:00

WHR showed up on my screener today and I opened a new PCCRC after it passed all of the tests. Here is the process I went through. First, I check the TOS screener I have set up called PCCRC. The settings in the screener are Last > 30, Volume > 1,000,000 , % Change > 10%, and IV between 25 and 50. I use 50 in the screener even though the highest IV I usually accept is 40% because sometimes a stock's IV will be greater than 40 but the long options IV for the trade I am looking at will be less than 40. Here is a screenshot of the TOS scan:

As you can see, WHR shows up with a 13.87% gain. The next step is to double-check that the options are liquid enough. The rule of thumb is that the 3 month average volume should be greater than 1 million shares. Since this TOS screener just shows today's volume, I use Yahoo Finance to check the 3 month average:

I also check the news articles verifying that the >10% jump is due to good earnings and increased guidance (and not because of a take-over or other reason). Then I look at a chart with IV and IV_SV plotted at the bottom of the chart. I want IV to be near 52 week lows so I use a 1 year daily chart. IV/SV needs to be under 1.

In this case 'IV is .34 and the 52 week low is 0.3. IV/SV is 0.94 so WHR still looks like a candidate. Lastly I open a potential PCCRC position in the Analyze tab. I use the next month options for the shorts (>14 days to expiration), and the first month with greater than 90 days to expiration for the longs. While I am adding the strikes I also look at the bid/ask of the options as a double-check on liquidity, generally not wanting a spread of more than 0.30. For the strike I usually use the first strike below the current price of the underlying, 115 here when WHR was around 115.90. I look at the risk graph to see if there is too much sag in the W shape. Ideally the upside will be entirely above the 0 line. Here is what WHR looks like:

The graph looked good so I created the order. The bid/ask on the order was something like 30.85/31.60. I ended up getting filled at 5 cents above the bid for each leg, or 31.05. At the close, WHR has dropped to 112.5 and the position is flat.

TPX PCCRC

I entered TPX as a high flier today. It posted results last Tuesday. I entered at the 35 strike today and the PCCRC was down 2 percent at the close.

CTXS PCCRC

I also entered CTXS today. It reported last Friday and although it did not go up 10%, IV has fallen near 52 week lows. The position lost 1% today.

Update 4/20/10

2010-04-20T16:38:00.000-04:00

I have a few days to catch up on. I will start with today and work backwards.

AAPL PCCRC

There was not much IV lift in AAPL before earnings, although IV was up some Monday. I closed the position this morning and it ended up with 13% loss. I attribute much of the loss for opening the position too early, i.e. after earnings but before the IPad announcement. I may open a new position tomorrow if it looks good. AAPL is one of the few I don't have to have a 10% jump after earnings to enter a PCCRC on.

RUT IC

The RUT IC profited from the down market on Friday. Today it was down 1% and overall it is now down 5%. RUT is at 721.55 and my shorts are at 680 and 780, so it is nearly centered right now, although overall this position has a -8 delta because of the 5/2 ratio of calls to puts.

OEX IC

The OEX IC took the big hit Friday with the GS indictment. When the short put strike was hit it looked like we would go a lot lower, so I only closed the shorts and left the longs open. This did not work however, and I ended up with a 43% loss on the position. Obviously this kind of trading cannot withstand those size losses, so I plan to always close both long and short in the future. I also had some trouble getting the orders through when I was getting out, which made matters worse. Had I successfully closed the entire put vertical, I could have escaped with a 35% loss or maybe a little less.

I will be looking for some PCCRCs over the next 2 weeks as there are many earnings reports coming out. I also plan to open a new OEX IC tomorrow.

Update 4/15/10

2010-04-15T17:38:00.000-04:00

OEX 1.5 Day IC

I opened the 1 1/2 day versionof the OEX Iron Condor today for a 0.25 credit. OEX was near 553 at the time it was opened and closed at 553.87. The short strikes are at 560 and 545. Today the position was flat.

RUT IC

I was filled on the last part of the RUT iron condor adjustment today, a 740/760/780 unbalanced fly (2/5/3). This gives me 5 calls verticals and 2 put verticals in the position. The position is down 14% overall with RUT up 1.81 to 724.21.

AAPL PCCRC

The AAPL PCCRC finally showed some signs of life today and was up 3%. AAPL was 3.23 and IV in the longs was up 2.5 points in two of the long options and 1 point in the other. Hopefully this is a sign of things to come in the next few days. Overall the position is down 11%.

Update 4/14/10

2010-04-14T16:41:00.002-04:00

RUT IC

The RUT IC moved to the first adjustment point in just one day, not a good sign. I tried to roll up the calls 2 strikes and increase from 4 to 5 contracts, as well as roll up the puts 3 strikes and decrease from 4 to 2 contracts. I ended up getting the puts filled and only partially filled the calls. I will try to get the other order through tomorrow. The position lost 11% today and is down 12% overall. The current risk graph is below. I also tried to fill a OEX 2.5 day IC today, but did not get filled. I may try that one again tomorrow.

AAPL PCCRC

The AAPL position was flat today. IV was flat, the underlying was up, but it is a negative theta position at this point. The puts should expire worthless Friday and earnings will come Tuesday.

Update 4/13/10

2010-04-13T19:57:00.000-04:00

RUT IC

I opened a new RUT iron condor today with RUT 703. The strikes are 630/650/740/760 and the credit was 4.465. The position lost 0.5% with RUT closing up at 707. The goal is 10-12% profit in the next couple of weeks. I will look for an OEX weekly IC tomorrow.

AAPL PCCRC

AAPL IV continues to fall with the long calls losing nearly 2 points today. The position lost 1.7% and is down 15% overall with 7 days until earnings.

Update 4/12/10

2010-04-12T22:03:00.000-04:00

WSM PCCRC

I closed the WSM PCCRC today as it has stayed near breakeven p/l since opening. Although the bid was near breakeven, the actual fill price was at 8.11 credit, giving the position a 2% overall loss. I will be looking for new PCCRC candidates in the next few weeks.

AAPL PCCRC

The AAPL PCCRC lost another 1.5% today and is down 13% overall. AAPL was up 50 cents but IV dropped on 3 of the 4 long options which is driving the p/l at this point. There are 8 days until earnings when the position will be closed if not earlier.

Update 4/9/10

2010-04-09T17:08:00.002-04:00

OEX Vertical

The OEX put vertical expired worthless after OEX closed at 545.46. The position yielded a 5% profit.

WSM PCCRC

The WSM position gained 2% today for a total gain of 1%. I have an order to close the position at breakeven but it did not fill because of the bid/ask spread.

AAPL PCCRC

AAPL was up 1.84 to 241.79 but IV on the longs went lower giving the position a 2% loss. It is down 12% overall now and I may close it out if IV keeps dropping. Some earnings announcements, IV rises a lot and others it stays flat, so it is hard to judge.

Update 4/8/10

2010-04-09T07:06:00.001-04:00

OEX Vertical

OEX approached the short put strike of 535, but then bounced to close at 542, putting the short vertical in good shape for expiration. It did not bounce enough to sell a call vertical and create an Iron condor, so this one will remain a vertical. The position was up 7.4% and is up 3.2% total.

WSM PCCRC

The WSM position lost 2% and is down 2% overall. I am still looking to close the entire position near breakeven rather than rolling. Due to a quote error, the graph and p/l are incorrect, so I will not post the risk graph.

AAPL PCCRC

I made 2 adjustments to the AAPL position to get it delta neutral and prepare for an IV spike before earnings. I rolled the Apr 210 call to May for 1.80 credit and I rolled the Jul 210 call to 240 for a 19.50 credit. The risk graph shows a change in volatility rather than expiration graph. The position was flat yesterday and is down 9% overall. I plan on letting the short Apr 210 puts expire worthless, then close the entire position on Apr 20.

Update 4/7/10

2010-04-07T22:20:00.001-04:00

OEX 2.5 Day IC

I was filled on the put side of the OEX IC today for 0.25 credit. I normally do the order as a full condor spread, but because of the prices I put in separate orders for the call and put side. The call side never filled, so right now I have the 535/530 Put vertical for 0.25 credit. The position lost 4% today. If OEX bounces back higher tomorrow, I may try to fill the call side, or I also may decide to just do the puts this week.

WSM PCCRC

The WSM PCCRC was up 2% today making it up 0.3% overall. Since the time value has eroded on the shorts, and the position is not really profitable, I put in an order to close the entire position, but it was not filled. I will likely try the same tomorrow.

AAPL PCCRC

The AAPL PCCRC was up 0.4% today and is still down 9% overall. The shorts time value is under 10 cents, but I do not think they will get exercised yet.

I have looked at several options and have decided to roll the short calls to May, roll the long 210 call to the 240 strike, and let the short put expire worthless. I looked at closing both the short call and put (and not rolling to May), but the delta goes from 20 to 116 and the risk is greatly increased on the downside.

If did not roll the long call, the delta is 38 but I still have some downside risk.

Also with a 5% IV jump (yellow line below), some of the graph is still below 0.

Rolling the call up gets me delta neutral, locks in some delta gains and centers the position in anticipation if IV climbing into earnings.

I plan on making these adjustments tomorrow.

Update 4/6/10

2010-04-07T07:40:00.001-04:00

CREE PCCRC Closed

I ended up closing the CREE PCCRC today for a 20% total profit. I initially was concerned about the shorts whose time value was less than 5 cents making the calls a candidate for exercise. But on the other hand, if CREE 's IV goes up 8-10 points over the next 11 days there could be a good bit more profit. I first decided I needed to close the short calls and puts. But if I did that the Delta went from 50 to 250, meaning a 1 point move down would cost $250 in profit, and a further move down could cost all of the profit. I wasn't willing to take the risk so I closed the entire position.

WSM PCCRC

The WSM position was completely flat today while the stock rose 0.13 to 28.07. The short calls are in danger of exercise and I may have to roll or close them soon.

AAPL PCCRC

The AAPL shorts are still holding some time value so I plan on keeping this trade going until the day before earnings. The last several earnings periods AAPL's IV has went up 8+ points which could turn this trade back to a profit. The position was down 1% today and is down 9% overall.

Update 4/5/10

2010-04-06T06:37:00.000-04:00

RUT IC

The RUT IC hit my profit target this morning, so I put a limit order in if RUT went outside about a 10 point range. The order was hit and filled at 1.15 to buy back the IC giving the position a 13% overall profit.

WSM PCCRC

Early in the day the WSM position was showing a profit but at the close it was down 1% on the day with a loss of 2% overall. I will look to roll or close this position on Friday.

CREE PCCRC

CREE was upgraded today and the stock was up 10% to 77.63. This help the position giving it a 9% daily profit and bringing the overall profit back up to 22%. I plan on keeping a tight leash on this one and closing it if the profit drops below 20%.

AAPL PCCRC

The AAPL position was up 0.3% today and is down 8% overall. Still waiting on a IV rise as earnings approaches on 4/20.

Update 4/2/10

2010-04-03T13:39:00.000-04:00

I was unable to give any updates this past week as I was on vacation. I did not make any adjustments or open new positions.

RUT IC

I had an order in to close the RUT IC at a 12% profit, but it did not fill. With the 3 day weekend theta decay this order will hopefully fill on Monday. Currently the profit stands at 11% with RUT at 684. Delta stands at -.26 and Theta is at 29.34, almost perfectly positioned.

WSM PCCRC

The WSM position has not done much and currently sits at a loss of 0.6%. WSM is at 27.04 with the short strike at 25. The IV of the long options is pretty much unchanged from when the position was opened.

CREE PCCRC

The CREE position endured a very bad week losing some profit every day. Currently the position is up 13%, but that is from a high of near 30% profit. In future positions like this I need to put in a stop-loss so if a position reaches 30% profit I will close it if profit drops to 25%. Unless a stock continues going up after a PCCRC is opened, the max VEGA profit is usually around 30%. At this point I will continue holding this position and see if IV will rise as we near earnings 4/21. IV dropped to 45.35 and 46.55 on the original long calls and puts on Thursday after they were both over 47 on Wednesday. CREE has been trading sideways near 70 and closed the week at 70.60.

AAPL PCCRC

The AAPL position ended the week basically flat and has lost 8.5% overall. Same game plan here, we'll see if approaching earnings helps the position, although it looks like this one is going to be a loser.

Update 3/26/10

2010-03-26T17:18:00.000-04:00

SPX IC

I was unable to watch the market for most of Thursday and it worked out in this trades favor because I would have closed it for a larger loss. As it turned out with the market drop yesterday and today many of the losses on this position were wiped out and I closed the entire position for a 4% loss.

OEX IC

The 2.5 day OEX IC worked again this week as all options will expire worthless as OEX closed almost dead-center at 534.81. This trade yielded a 6% gain in 2.5 days. I do not plan on trading the OEX 2.5 day IC next week as I will not be able to watch the market.

RUT IC

The RUT IC is doing well up 2% today and 5% overall. The center of the risk graph is at 680 and RUT closed the week at 678.97.

AAPL PCCRC

The AAPL PCCRC position is up 1% over the last 2 days and is down 8% overall.

CREE PCCRC

The CREE position continues to struggle this month and was down 3% the last 2 days while up 18% overall.

WSM PCCRC

The WSM position is hanging out near breakeven and has a 1% gain overall.

Update 3/24/10

2010-03-24T17:30:00.000-04:00

The updates may be sporadic over the next 2 weeks due to vacation time. I have opened 2 trades since last Friday.

WSM PCCRC

After a good earnings announcement on Monday, I opened a PCCRC in WSM. The only criteria it failed was the price was <30, but that criteria is mainly to keep commissions down. I was filled at 8.30 debit for the Apr/Aug 25 strike and so far the trade has hovered near breakeven.

OEX 2.5 Day IC

I opened an IC in OEX today and got a good fill of 0.30 on TOS (mid was 0.25 right after the fill). The short strikes are at 525 and 545 and the trade was up 2% today with OEX staying nearly centered at 534.44.

RUT IC

With the drop in the market today the RUT IC was up 1% and is up 3% overall.

SPX IC

The SPX IC benefited the most from the market fall today, although this trade will be lucky to reach breakeven. Today the position was up 8% and overall it is down 11%.

CREE PCCRC

Both CREE and AAPL's earnings are scheduled to be after the market on April 21. So that is after this month's shorts expiration. I will have to look closely at the position before deciding whether to roll to May, which would only be for a few days, but that may be beneficial depending on what happens to IV between now and then. Today the CREE position lost 1% and is up 20% overall.

AAPL PCCRC

The AAPL position finally had a good day and was up 2%, however it is still down 9% overall.

Update 3/19/10

2010-03-19T17:21:00.000-04:00

SPX IC

With the market moving down the SPX IC had a good day with a 6% gain today. It is down 8% overall.

OEX IC

The OEX IC got to within 3 points of the short put, but bounced from there yielding the full gain of 7.5% for the 2.5 day trade.

RUT IC

The RUT IC did ok in the down market today up 1.8% and up 0.4% overall.

AAPL PCCRC

The PCCRCs did not do as well and AAPL dropped 2.4 points on the day. The position was down 0.5% today and is off 10% overall.

CREE PCCRC

The CREE position was down 1% on the day and is up 22% overall. I am thinking about closing this one if the profit continues to go down. Hindsight says I should have closed it when it was up 30%.