Sold 5 VXX May OTM(40) puts against new VXX shares short.
5 VXX(46) calls sold expired worthless.
Closed 1K VXX shares short. Got more than enough for this week's cut.
Sold 5 WLL May OTM calls.
Sold 5 CLR Jun OTM calls.
Sold 5 May-1st SNDK near-the-money calls.
Sold 5 May-1st WAG OTM calls.
Shorted 500 SLB shares. It's been some time I shorted shares. Earning's over and not that strong after the earning. But then,
Closed 500 SLB shares when it dropped. because I needed fund. Sold near day high and closed near day low, very lucky.
Shorted 500 COP shares.
6 sets of calls expired worthless:
DECK(5), SLB(5), DISH(5x2), COF(5), OUTR(5)
7 sets of calls assigned:
CAT(5), SLB(5x2), APC(5), RRC(5x2), CLR(5)
Too many calls assigned.
1 set of puts sold against share short expired worthless:
Sold 36 UNG May-4th deep ITM calls.
Sold 10 UNG May near-the-money calls.
Sold 20 UNG next week ITM calls.
Sold 10 UNG May-1st ITM calls.
Bought 50 UNG Jul OTM calls.
Rolled 34 UNG calls sold assigned.
20 UNG calls sold assigned.
Some of UNG calls sold were close to expiring worthless but today's spike made things difficult. Have to wait one more week for the next card.
Didn't know until 2PM that today is option expiration and market is closed on FRI.
Account some minus. Would have been some plus if not for UNG spike. Getting too heavy on resource related stocks. This sector is very strong recently. Need to get rid of assigned share shorts or increase VXX short upon any up move.
Sold 5 VXX May OTM(42) puts against new VXX shares short. VXX went down too much today. It helped my account stay plus, but I would have liked the other way around more.
Sold 5 RRC Apr near-the-money calls.
Sold 5 RRC May OTM calls.
Closed 500 IBM shares short assigned from calls sold. I had to enter earning with this short and was lucky. Closed on drop after earnings, May go down much further, but I think I got enough.
Closed 5 sets of Apr calls sold, at $0.02 - $0.16, for which I already got my daily cuts, to make fund available for any further market climb:
FSLR(5x3), WDC(5), DECK(5)
Closed 100 UNG share short assigned from 1 deep ITM calls sold.
Looking at USO short but lingering Ukrain issue made me think again. Didn't want to build too much short for things that would spike if something happens in Ukrain, VXX & USO, and maybe UNG.
Account a bit plus, recoverying yesterday's loss. Hope GOOG/IBM earning weakness puts pressure on market tomorrow. Account is plus but I hate the market action today, up so much. Looking forward to UNG action after inventory report tomorrow.
Short 1K VXX shares.
Sold 5 VXX weekly near-the-money(46) calls.
Sold 5 VXX May-end OTM(50) calls.
Hope this is not the end of this spike. I didn't sell enough yet. Glad that I sold some before VXX sunk so much.
Closed 500 DECK shares short assigned from calls sold.
Sold 10 UNG next week near-the-money calls.
Rolled 59 UNG deep ITM calls assigned to May/May-4th. This is real pain almost everyday now. But, been making some profit during rolling these days.
Account a bit minus, giving up yesterday's gain. Need to think about whether to sell more calls if market goes up this week or wait until it hits ATH again.
Finally, filed income tax and paid off remainder of 2012 tax installment. My account was in a mess a year ago and could not afford to pay tax from trade fund, so went with installment payment. Also, paid EIT enough to cover 2013 tax so I don't have to worry about EIT regardless of how much I make this year from trading.
Short 1K VXX shares.
Sold 5 VXX May OTM (50) calls.
Decided to sell VXX shares given the amount of market short I am holding, while I feel that this is not the end of this spike.
Closed 3 sets of Apr calls expiring this week at $0.10 - $0.13, to make fund to roll UNG calls sold assigned, already got my daily cuts from these calls.
CMI(5), FSLR(5), MON(5)
Closed 500 DECK share short assigned from calls sold.
Sold 5 WAG Apr-end OTM calls.
Closed 500 UAL share short.
Rolled 79 UNG deep ITM calls sold assigned to May-2nd week.
Sold 10 UNG Jul near-the-money calls.
Account a bit plus.
I in fact think it will be $20 in early 2015. However, if you think more volatility is on our way, then wait a few months to get a better price on this decaying product.
Yes, it can be stressful, especially if you don't share the stress with those close to you or they just can't relate. I can tell you that I have more gray hairs than my father.
I think the usual reminders around position sizing, setting stop losses (even if mental) and not letting a trade turn into an investment apply here too. Also, it's mentally a bit more difficult when you are presented with early success and early gains. It's easy to give it all back, and then some. Been there, done that.
Weather in the NE is above 70 for the next two days, if it helps.
Replied to continue...
With premiums collected by selling calls and puts, and profits from shorting-high closing-low, by early Apr, when it came down to about $165, I was able to reduce the loss to under $40K, and I exit all NFLX positions then, after more than 2 months of pain.
After this NFLX ordeal, I started VXX short on a daily basis, selling calls and shorting shares. Also, this is when I started thinking about 400 bucks per day with VXX.
I played next two NFLX earnings with short iron condor, won one and lost the other. Again shorted from $290 on Sep assigned by calls sold and exit about break even. Still my NFLX trade is plus because of gains from NFLX shorting/selling calls throughout 2012.
Now, one good NFLX trade:
Jan 2012 upon NFLX spike after earnings, I sold NFLX Jan 2014 $155 LEAP calls when NFLX was about $115, and on Feb 2012 sold Jan 2014 $190 when NFLX was about $130, each 10 calls at $25. It was just crazy premium. I was able to close one at $1.2 on June 2012 and the other at $1.7 on July 2012 when NFLX plunged, giving me more than $45K.
What is amazing: the calls that I closed, came back up and expired at $175 and $140 on Jan 18 2014.
Even these days I follow NFLX chart but I didn't touch it since Oct last year and hope to remain so.
Another good thing came out of NFLX ordeal. I needed to concentrate on something else to get the thoughts of this failed trade out of my mind. So, I worked very hard even at home, was able to learn new technology for new project very quickly, which I joined late, and earned respect from my team and impressed my boss.
Odd things happen when a man is in deep pain. Very grateful that I survived to tell.
This NFLX ordeal is what can happen to my trade, and I cannot tell this won't happen again with UNG this time. Good luck trading to all and to me....
I wanted to write about how silly I was and maybe I still am. Something to think about my *conviction*. It's about a stock that went up more than $100 while I was holding.............................................. SHORT. This trade made my early part of 2013 very miserable.
It started when I shorted 800 shares of NFLX at about $90 on 12/12/12. It did come down below my short price but didn't go down as much as I wanted and I kept the position, and continued selling calls and collecting call premiums.
Then came earnings on 1/23/13, when I thought the earning was 1/24/13. I'm not sure whether I would have closed the short position even if the earning was 1/24. It jumped to $130s after hours, then the nightmare started. Next day it went up to $149 and then came down some, so I thought not a big deal and shorted another 800 shares at $145 and sold puts against the short when it came down further.
Then the next day it closed at about $170, it went sideways between 160 and 175 for about a week, then another leg up to between 175 and 190, and finally it reached high of 197.62. I was sitting on $116K of loss on those two positions at $190, while my account alreay shrank at the end of 2012.
I started selling NFLX calls on up days and puts against short positions on down days, and also kept shorting high and closing low as it climbed. Option selling was profitable as call/put premium was so very high. My highest short price was about $190.
I was juggling with maintenance calls between two accounts, put one account on maintenance call and when it becomes due in 5 days, move the maintenance call to the other account, going back and forth.
This is when I learned about higher maintenance requirement for concentrated positions, couldn't believe there's still no buying power after I close substantial amount of other short position. As soon as I close other position, maintenance requirement for NFLX jumped because NFLX occupied much higher portion of my account.
Jan 2016 puts, $20 strike
I know the long term trend is toward decay but we've had a big of turbulence since roughly the 14th of January. I attribute this a bit to the unwinding of the fed, but we've also had other issues which seem to have 'come and gone' during that period. On Weds this week we had what looked like the end of a 4-month volatilty spell, especially when compared with '12 and '13.
What does everyone think about the outlook of getting back to $20 by 20 months from now?
lf, UNG is one of shorts that I just have conviction like USO last summer. There is always risk but I'm willing to risk based on my conviction. I agree that next inventory report is crucial. I heard that 5 year average injection for last report was 9 while last week was 4 or 5, not much lower. Given better weather for next report (by the way, I don't even know exactly which dates are included in the report), I'm hoping that 5 year average can easily be achieved in the next report. My hope is that I cannot be that unlucky (or lucky) to build short position at the very moment UNG changes its behavior from several years of trend.
It seems I'm still plus, not very much though, with realized profit from OTM/ATM calls sold expired worthless and from positions closed low and re-open high. I'm planning to sell more OTM/ATM calls on bumps while waiting for drop so I can cover roll cost and realize some profit while waiting.
Disclaimer to others: I have fund/positions that I can use to withstand UNG spike, if so happens, without losing my current position. As discussed, it's in critical stage and it may get volatile. Best to stay way if you didn't do your thorough DD.
Well, after an initial quick 6% gain on my UNG short that I noted, I have given almost all of it back. I am less sure of futures prices coming down now, because it seems everyone has been modeling in adequate injections during this shoulder season. I think the next injection is critical. We are in danger of analysts starting to raise their average price forcasts for the rest of the year. Not sure we'll see enough contango between now and next heating season to make up for it.
So far, your general strategy has been a winner and one which I think a lot of us here are in envy of. However, while you tend to hedge your market shorts with a market long position (via short VXX), this UNG play seems unhedged. You may want to consider hedging elsewhere in the commodity space (maybe long a natural gas producer or pipeline play?)
Well, I envy you for making that much. I made a lot in my standard but much less than that. I was very lucky and fund has grown a lot past year. But, holding short on so many different stocks doesn't give extreme profit but also protects from extreme loss.
Now I'm going after 400 bucks per day and outperformed it past couple of months. I find it fascinating that if we are less greedy (or willing to give up big gain/hit) there's way to make decent money (in my standard) by selling OTM options with much less risk and stress. As my fund grow, I'll be selling farther OTM calls, so profit rate compared to my capital may become less but similar or larger profit amount with larger fund.
But I also realize the risk of selling OTM calls. Since it costs less maintenance requirement to sell OTM calls than selling equivalent number of shares, I may end up selling more than I can handle. When looking at individual stock, I'm comfortable getting those calls sold assigned. But, when most or many of them are assigned, it may cost more than I can handle. So, I need better mechanism to track how much I can sell OTM calls considering a scenario where most of them get assigned. I hope I'm not too late in feeling this.
So many UNG deep ITM calls are assigned last night. It's a real pain when no short shares are available. I'll have tough time rolling them on Monday especially if market goes up. Thinking of buying deep ITM puts instead of selling deep ITM calls to escape from this call assignment/roll business. UNG became one of my biggest bets. I'm not much worried yet but certainly it's taking longer than I thought.
Shorted 1K VXX shares.
Sold 5 VXX May 55 calls.
Sold 5 VXX Jun 54 calls.
Sold 5 VXX May-end 50 calls.
5 VXX 43 puts sold expired worthless.
5 VXX 44 puts sold expired worthless.
Started selling VXX shares and calls. Looks like I'm becoming faint-hearted in case of VXX. I feel I'm overly cautious these days in selling VXX while I have considerable amount of market short. Just feels more dip coming. So, ended up selling far OTM farther out calls instead of near-term calls or shares.
Rolled 33 UNG calls assigned to Apr-end/May-2nd.
Sold 5 WAG Apr-end OTM calls.
Not much calls left after closing most of them yesterday.
2 sets of calls sold assigned share short:
2 sets of calls sold expired worthless:
Not much calls sold for Apr-end and later expiration due to earnings and not much items up past couple of days.
Account good plus and ATH. Maybe I should have closed some of share shorts today. Hoping I get better price next week. Finally feel like spring with all the flowers around.
Take a look at the 3 year chart for NUGT. Last year it had 2 reverse splits. There is a downward bias to the share price probably due to the use of options to maintain the 3x pricing. This would be similar to UVXY which declines because of contango.
I'm surprised that UNG climbed this high, but on the other hand, I'm glad that it came up this high giving me opportunity to sell higher. I hope it does go up too high from here. I believe nobody knows where it's going, but I'm prepared to see UNG higher by a dollar or two, but hope not more.
I wanted to get my hands on gold from a year ago, GLD or GDX, but never got chance and not confident that I understand enough to long or short. I don't trade leveraged ETFs, except maybe DGAZ on another UNG spike. I'm at a stage where keeping what I have is much more important than making more by risking more. So, the minimum I can do is to stay away from leveraged ETFs. Good luck trading.
I noticed that Brian Kelly on Fast Money today had recommended UNG as a buy. He did not give any reasons for his recommendation.
Have you been shorting NUGT? Being 3X, it is capable of very large daily moves.
What a day!
Closed 5 VXX weekly 55 calls sold, at 0.01.
Closed 5 VXX Apr 55 calls sold, at 0.04.
I didn't sell any VXX again today, VXX coming back up to mid $43 third time this week. VXX may sink again after hitting mid $43 but I am betting it will spike this time. So, not selling any VXX today.
Needed fund to sell UNG so started closing calls sold for which I made daily cuts already, as they don't earn much even if market goes down big. So, kept share shorts and closed calls sold that are dying that are set to expire worthless this week or next week.
10 sets of calls sold closed at $0.01 - $0.20:
ISRG(1x2), FSLR(5), HAL(5), FIVE(5), KSS(5), SNDK(5), DTV(5), DD(5), WDC(5)
Closed 250 HAL shares short, half of what's assigned from calls sold.
Sold 55 UNG Apr-end deep ITM calls.
Sold 10 UNG Apr ITM calls.
Sold 10 UNG May-1st ATM calls.
Sold 10 UNG May-2nd ATM calls.
Bought 50 UNG Jul OTM puts.
I guess UNG real battle begins now. Finally, inventory report showed injection but it was too small I guess. With this spike, I'm hoping producers would ramp-up production. UNG futures are still in contango which is relief as UNG future roll is coming up next week.
Account good plus, recovered about 3/4 of yesterday's loss, not fully due to UNG spike today. Thank God market is down big today while UNG spiked. Otherwise, it would have been very difficult.