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Saturday, August 20, 2016

Weekend Portfolio Analysis (August 20, 2016)

Back in the Home of the Brave, welcomed by total boredom in the markets. Every now and then we get summers like this one of very little activity. As an options seller, this is good if you are already riding a few positions. Typically not so good if you want to initiate new ones. But, you've got to play the card you're dealt. In any case, weeks like the ones we have had in August, are good to dedicate time to your hobbies, better focus on the job, etc, etc, etc. Not so good to constantly be entering and exiting the markets, feeding your insatiable broker with an endless supply of commissions.

Recent Trading Activity

- I just stayed lazy my friends.

Market Conditions
(Click on image to enlarge)
Stochastics: 62 (neutral)
McClellan: -57 (neutral)
Stocks above their 20 DMA: 59% (neutral)

No man's land.

There's really nothing else to say folks. Very little activity and the last days of August are still ahead of us. I'm inclined to think we will keep seeing this dull market for the rest of the month. Then activity should increase as we get into September.

Current Portfolio

SEP SPX 1825/1800 Debit Put Spread + 1625/1600 Credit Put Spread
Portfolio Insurance

OCT SPX 1825/1800 Debit Put Spread + 1625/1600 Credit Put Spread
Portfolio Insurance

September SPX 1970/1980 Credit Put Spread 
$1,200 credit. Looking really healthy. No concerns. I've been thinking of closing it, but then I wouldn't be deploying that capital elsewhere at the moment, so, no pressure to close it early.

September RUT/IWM 1090/1100/113/1280/1290 Lazy Elephant
An overall 80% probability of success, feeling comfortable at the moment. 4 deltas on the Put side, 11 deltas on the Call side. Not too bad. The plan is to close this one early at around 8%-10% return on risk. Between $600 - $800 would make me happy and the reason to close early is to reduce market exposure as I am about to start trading October positions.

Action Plan for the Week

- By the end of the week, the game plan is to enter an SPX October Unbalanced Iron Condor. Short Put around 1985, short Calls around 2275. Of course, these numbers may change if the markets move with some conviction in one direction before Friday.

- If RUT hits 1,265 or so, I may take a small loss and redeploy the Call side of the RUT Elephant at higher strike prices (higher than 1,300). This way, I will still be profitable overall at the end. RUT 1,300 by September expiration looks like a very tall order to me.

That's about it. Simple plan with no complications. Lately, I've been looking at the markets less than 5 minutes per day, including days where I haven't had the need to open my trading platform at all and looking at market quotes on my phone has been enough.

With the elections looming, I don't think we will keep seeing these super quiet markets the rest of the year. But for now, the calm remains, and it's time to trade least this week.

Economic Calendar

Tuesday: New Home Sales
Wednesday: Existing Home Sales, Crude Oil Inventories
Thursday: Core Durable Goods Orders, Services PMI
Friday: GDP

Options Trading results: Up +2.94% YTD vs S&P up +6.85%. Portfolio 37% invested, 63% cash.
Forex Trading results: Down 4.16% for the year. No Position at the moment.

Have a nice week folks!

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