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Saturday, March 25, 2017

Weekend Portfolio Analysis (March 25, 2017)

This week's analysis has been published at LTOptions.com

Download Weekend Portfolio Analysis (2017-03-25).pdf

If the above link doesn't work for you, simply log in to LTOptions.com, navigate to the "Weekly Analysis" tab and download the document from there.

The Weekend Portfolio Analysis will be available on this site next week for historical reference.

All currently open positions can be seen on the Track Record page


Last Weekend Analysis: Weekend Portfolio Analysis (March 18, 2017) 
Recent Trading Activity

- No activity. I tried to initiate an SPX Unbalanced Iron Condor on Friday (using regular May expiration options, which were 8 weeks out in time) and was not lucky getting filled.

Market Conditions

(Click on image to enlarge)
Stochastics: 27 (neutral)
McClellan: -27 (neutral)
Stocks above their 20 DMA: 37% (neutral)

No man's land.

So, we're neutral but not too far from a short-term oversold extreme. Indeed, it was almost reached this week according to the rules but an afternoon rebound on Wednesday prevented it. I would have love to sell a Credit Put spread. Three months into the year and not a single individual Credit Put spread sold. That's surprising to me, but I didn't want to rush the decision anyway.

In these circumstances, I would normally sell a May Unbalanced Iron Condor, but, given the fact that we are closer to an oversold extreme, I may change my mind this time and go with an Unbalanced SPX Elephant on Monday. So, I'd be trading the Elephant first, and then 6 weeks to expiration I would initiate a May Unbalanced Iron Condor if the market is in a more neutral stage. Just flipping the order for the May expiration cycle folks. The Elephant allows me to have an overall winning position in case of a market rebound that threatens the Call side of the position, so I am going to trade the Elephant first and the Condor later in the May cycle. Of course, this is all assuming we don't reach a short-term oversold condition, in which case the go to play would simply be a Credit Put spread.

VIX at 12.96. Still a very low number, but if we stopped trading we may not make a penny in months. It's been ages since the last VIX > 15 readings and nobody knows for how many more months this can go on. 

And here's the Russell 2000, where there is an April Unbalanced Elephant:
(Click on image to enlarge)



Current Portfolio

APR SPX 2175/2180 Credit Put spread
Used to be an Iron Condor until the 2455/2460 was taken off the table. $960 credit. 4 weeks to expiration. Very comfortable at the 7-delta mark. No concerns.


APR RUT/IWM 1260/1270/1450/1460/129/146 Unbalanced Elephant
$1,396 net credit, 4 weeks to expiration.
Defense lines set around $1,315 to the downside (adjust Credit Put spread) and $1,425 to the upside (close Call side for small loss and ride the Put side to expiration to obtain an overall net gain despite the Call loss).

Action Plan for the Week

- Adjust RUT Elephant's Put side if RUT falls to 1,315. Close the Call options is RUT reaches 1,425. This includes the 1450/1460 RUT Credit Call spreads and the IWM Long 146 Calls. Closing it all for a combined loss of $700 would allow us to make money through the Put side and its $1,200 credit, eventually resulting in a net $500 gain. If neither of the levels just mentioned is reached, do nothing.

- If an overbought environment is reached, I'll consider re-establishing the Call side on the April SPX position, making it an Unbalanced Iron Condor again. Ideally, I would like to sell 1470/1480 CCS for 0.90 or better.

- On Monday, I'll enter the first May position. If we have an overnight gap down that happens to put us in an oversold environment I will just go with a May RUT Credit Put spread. Short strike around 10 deltas as usual.

- If we don't see the above scenario, then I will simply go with a May SPX Unbalanced Elephant. The candidate strike prices are, on the Put side 2140/2150 (20 contracts), on the Call side 2450/2460 (8 contracts). That part can be entered as an Unbalanced Iron Condor. Then the long Strangle using SPY options, strike prices 221/246, number of contracts 1 and 12 respectively.

- If we have a big gap up, and I'm talking 15 SPX points or more, then I will just go as usual with the SPX Unbalanced Iron Condor instead of the Elephant described above.

-  If I start the week with either an Unbalanced Elephant or an Unbalanced Iron Condor, and then later in the week an oversold condition is reached, I will initiate a May RUT Credit Put spread. Essentially never missing the opportunity to sell Credit Put spreads during oversold conditions.



Economic Calendar

Tuesday: Goods Trade Balance and Consumer Confidence. Crude Oil Inventories.
Wednesday: Pending Home Sales. Crude Oil Inventories.
Thursday: US GDP. China's Manufacturing and Non-Manufacturing PMI.

Take it easy folks,
LT


If you are interested in a responsible and sustainable way of trading options for consistent income with solid risk management, consider acquiring LTOptions, my options trading system to the last detail.

Check out 2017 Track Record


Go to the bottom of this page in order to see the Legal Stuff

Saturday, March 18, 2017

Weekend Portfolio Analysis (March 18, 2017)

This week's analysis has been published at LTOptions.com

Download Weekend Portfolio Analysis (2017-03-18).pdf

If the above link doesn't work for you, simply log in to LTOptions.com, navigate to the "Weekly Analysis" tab and download the document from there.

The Weekend Portfolio Analysis will be available on this site next week for historical reference.

All currently open positions can be seen on the Track Record page


Related Article: Weekend Portfolio Analysis (March 11, 2017) 
Recent Trading Activity

- Initiated an April RUT/IWM Unbalanced Elephant position on Monday. Net credit $1,396.

- Closed 2455/2460 Call side of March SPX Unbalanced Iron Condor on Monday. Just as planned over the weekend, closing for a small $240 gain.

- March SPX 2100/2090 Credit Put spread expired for max profit on Friday. The SPY 214 long Put also expired, as a loss in this case. The combined result: +$1,200 - $126 = +$1,074. Details and thoughts in the provided link.

Monday, March 13, 2017

April 2017 RUT Unbalanced Elephant

Trade Details:

20 RUT 1270/1260 Credit Put spreads 0.60 Credit ($1200)
8 RUT 1450/1460 Credit Call spreads 0.86 Credit ($688)

plus

2/24 IWM 129/146 Unbalanced Long Strangle (.78 debit for the 129 strike Put, .14 debit for the 146 strike Calls. Total debit paid: $492 )

Net Credit: $1396
Days to Expiration: 39

Saturday, March 11, 2017

Weekend Portfolio Analysis (March 11, 2017)

This week's analysis has been published at LTOptions.com

Download Weekend Portfolio Analysis (2017-03-11).pdf

If the above link doesn't work for you, simply log in to LTOptions.com, navigate to the "Weekly Analysis" tab and download the document from there.

The Weekend Portfolio Analysis will be available on this site next week for historical reference.

All currently open positions can be seen on the Track Record page


Related Article: Weekend Portfolio Analysis (March 4, 2017) 
Recent Trading Activity

- Closed March RUT Unbalanced Elephant for a $1,210 gain on Monday

- Closed the May SPX 2520/2530 Credit Call spread for a $750 gain on Thursday

In addition, I tried to enter a new position on Friday using April options. I was a little divided because we were not totally oversold according to the rules but very very close to it. So, I first tried a RUT Elephant, which never got filled. Then I tried a 1250/1240 Credit Put spread. No luck either. Changed it to 1260/1250, no fills. The market rebounded in the afternoon so I tried an Elephant again and, no fills. Tough Friday. I was busy at work too, which made it a bit more complicated. I'll add the new position on Monday.


Market Conditions

(Click on image to enlarge)
Stochastics: 23 (neutral)
McClellan: -186 (oversold)
Stocks above their 20 DMA: 35% (neutral)

No man's land. Close to short term oversold.

The index is now 2.7% higher than its own 50-Day average. More reasonable than 4.6% at one point the previous week, which was extreme. What concerns me a little bit, regarding Call spread positions, is the fact that all three indicators quickly went near oversold territory and yet the SPX index has barely gone down. RUT was weaker on the other hand, but now we are in a situation where there is some upside room.


And here's the Russell 2000, where I have no position at the moment:
(Click on image to enlarge)
Now below its 50-Day average and clearly more oversold than the SPX. I haven't ruled out the possibility of initiating an April Credit Put spread position here on Monday instead of an Elephant. We'll see if we get a weak opening.


Current Portfolio

MAR SPX 2090/2100 Credit Put spread hedged with SPY 214 Put
Max potential profit of $1,074. One week to expiration and no concerns. I won't touch it.



APR SPX 2175/2180/2455/2460 Unbalanced Iron Condor
$2,000 credit. 6 weeks to expiration. Put side comfortable at 7 deltas. Call side now comfortable, down to 9 deltas (from 17 last weekend and from 23 deltas reached on March 1st).

(Click on image to enlarge)
Decision point to the upside is now somewhere between 2,420 and 2,425. By looking at the Option chain, those levels (2420 and 2425) have somewhere between 20%-23% chance of happening. At the same time, given the pressure I felt earlier with this 2455/2460 Credit Call spread, I am now inclined to close it for break-even if possible. I wanted to close it for 50% of max profit this past week, but despite the indicators reaching near short term oversold conditions all I could see in this spread in particular were tiny gains and mostly a scratch most of the time.

Action Plan for the Week

- Let the March 2100/2090 Credit Put spread expire for max profit on Friday.

- The April SPX Unbalanced Iron Condor. If SPX reaches 2,420-2,425 this week (2,455 strike price reaching 30 deltas), the 2455/2460 Call side will be adjusted up to 2500/2510 or something similar. If a 1.00 Credit for this spread is not possible, I will go to May in order to position it higher, in the 2,535 neighborhood and with a greater number of contracts. At the same time, if I can close this 2455/2460 problem child for 0.50 debit, I will take it off the table (initial credit received was 0.52, so it would be a scratch when commissions are factored in).

- Inventory is light. I will be entering the second April position on Monday. With a weak opening I will default to RUT Credit Put spread around 1,260 or 1,250. On a strong opening I will use an Unbalanced Lazy Elephant following the usual guidelines described here.


Economic Calendar
We have the Fed Rate decision in the calendar this week. That will be on Wednesday. So, there's a chance the markets will be in waiting mode (barely moving) until then.

Monday: China's Industrial Production
Tuesday: US PPI, German ZEW Economic Sentiment
Wednesday: US Retail Sales. Crude Oil Inventories. FED meeting and Interest Rate decision
Thursday: Europe's CPI. US Building Permits, Housing Starts, Philly Fed Index

Good luck this week folks,
LT


If you are interested in a responsible and sustainable way of trading options for consistent income with solid risk management, consider acquiring LTOptions, my options trading system to the last detail.

Check out 2017 Track Record


Go to the bottom of this page in order to see the Legal Stuff

Saturday, March 4, 2017

Weekend Portfolio Analysis (March 4, 2017)

This week's analysis has been published at LTOptions.com

Download Weekend Portfolio Analysis (2017-03-04).pdf

If the above link doesn't work for you, simply log in to LTOptions.com, navigate to the "Weekly Analysis" tab and download the document from there.

The Weekend Portfolio Analysis will be available on this site next week for historical reference.

All currently open positions can be seen on the Track Record page


Related Article: Weekend Portfolio Analysis (February 25, 2017) 
Recent Trading Activity

- Closed Call side of March SPX Unbalanced Iron Condor on Wednesday. Net loss $2,430. Deployed a May SPX 2520/2530 Credit Call spread, receiving a new $1,350 credit.

Wednesday, March 1, 2017

Options Trading Monthly Digest (February 2017)

Time to reflect Options trading results for the month of February. This includes positions that were closed throughout the month and the Year To Date balances of each Options Trading Strategy.

Hopefully these monthly updates will provide readers with confidence and serve as an authentic guide of what can be achieved with a realistic and sustainable approach to the business of Selling Options.

Saturday, February 25, 2017

Weekend Portfolio Analysis (February 25, 2017)

This week's analysis has been published at LTOptions.com

Download Weekend Portfolio Analysis (2017-02-25).pdf

If the above link doesn't work for you, simply log in to LTOptions.com, navigate to the "Weekly Analysis" tab and download the document from there.

The Weekend Portfolio Analysis will be available on this site next week for historical reference.

All currently open positions can be seen on the Track Record page


Related Article: Weekend Portfolio Analysis (February 19, 2017) 
Recent Trading Activity

- Added 2400 strike price Long Calls to the March SPX Unbalanced IC as an upside hedge on Tuesday. Basically giving away most of my potential gains from the 2400/2410 Credit Call spread side in exchange for reduced upside risk. Because I was short 2400 strike Calls already, the Calls purchased this week only reduce my short exposure. So, the current position now is as follows, in terms of number of contracts: 20/20/13/15  (from 20/20/15/15 previously).

- Initiated an April SPX 2175/2180/2455/2460 Unbalanced Iron Condor position on Friday. I made a mistake specifying the credit in my limit order. I could have done better. It is a small, worth sharing lesson. Details here.