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Saturday, April 29, 2017

Weekend Portfolio Analysis (April 29, 2017)

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

Download Weekend Portfolio Analysis (2017-04-29).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The Weekend Portfolio Analysis will be available on this site next week for historical reference.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 now available: Weekend Portfolio Analysis (April 22, 2017) 
Recent Trading Activity

- Closed Call side of May RUT Elephant at a $716 loss on Tuesday. A bit frustrating yes, but the Put side is still in play and now at only 2 deltas and with a credit that is greater than this initial loss from the Call side. So, in the end the position will be a winner overall, just a smaller one than we would have liked.
<!!--more-->
Market Conditions
(Click on image to enlarge)
Stochastics: 82 (Overbought. Up from 52 last week)
McClellan: +25 (Neutral. Up from +19 last week)
Stocks above their 20 DMA: 62% (Neutral. Up from 59% last week)

No man's land. Indicators modestly up from last week.

VIX below 11 again. Not attractive for the Options selling business as it has mostly been the norm so far this year. But, I'll put more capital to work. You can opt to just make smaller bets during these environments. I'll go with an Unbalanced Elephant or Iron Condor this week if the neutral conditions persist. On the chart above there are now two potential horizontal lines, ideally the index stays between 2,325 and 2,400 for a while. That would allow us to make some money even in ultra low VIX environments.

And the Russell 2000, where I know have less upside exposure and the May expiration Puts look like sure winners:
(Click on image to enlarge)
Resistance at the upper end of the long-term uptrend channel held beautifully this week.


Current Portfolio

MAY SPX/SPY 2150/2160/2440/2450/221/245 Unbalanced Elephant
$1,529 net credit, 3 more weeks to expiration. Looking safe on the Put side, and relatively safe on the Call side, but not a slam dunk.

Defense line is SPX 2,215 to the downside (adjust Credit Put spread) and 2,415 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). It was not possible to take this one off the table for the $1,200 I mentioned in the previous Action Plan. Things improved a bit with seven more days of Theta, decreased volatility and the small decline late in the week. The position is now showing roughly $1,100 in open profits out of $1,529 max potential. That's 72% of the max profit achieved in 62% of the days (5 weeks in play out of 8 weeks to expiration when it was entered). So, not too bad.

Given the loss taken on Call side of the May RUT Elephant, I'm thinking of closing the Call side of this May SPX Elephant for a scratch (small win or break-even). Even though the Call side of an Elephant is never a concern, I just don't want to see a second winner reduced in the same expiration cycle. The other thing we can do, is to just close the Credit Call spreads, which at 6 deltas are currently showing +$240 gains, and leave the long SPY Call options in play, almost worthless now at just 0.06 debit.

That would leave us with the following risk profile:
With just 3 weeks to expiration, the index would have to react in our favor quickly in order to truly leverage that unlimited upside potential. But it is an interesting idea that can be exploited and perhaps with more days to expiration in the future, which would be nice.


MAY RUT 1230/1240 Credit Put spread hedged with IWM 126 Long Puts
Net credit: $1092. Three weeks to expiration.
This is the remainder of the May RUT unbalanced Lazy Elephant.
Defense line: 1,280.
The IWM long 126 strike Puts are worth 0.10 each. They are unlikely to be needed and you can consider taking them off and save $20 bucks (minus commissions) before they expire worthless. Personally, I think I'll just leave them there.


JUN RUT/IWM 1220/1230/1470/1480/126/148 Unbalanced Elephant
Seven weeks to expiration. Credit Put spread side comfortable at 5 deltas. Call side not in terrible shape but not so comfortable:

Defense lines are 1,285 and 1,430.


Action Plan for the Week

- Close the entire Call side of May SPX Elephant for a scratch early in the week. Consider leaving the SPY Long Call options in play to produce an unlimited potential profit situation as illustrated earlier. If the market gaps up and it is not possible to close the Elephant's call side for a scratch then close at a loss if SPX rallies past 2,415. If the market gaps down on Monday and the whole Elephant suddenly shows +$1,200 in open profits, I'll close the whole thing.

- Close the Call side of June RUT Elephant with RUT rallying past 1,430. Consider taking Call side off the table for small gain (currently showing loss) if RUT keeps getting weak.

- Initiate the second June position. I want to use SPX this time and most likely an Unbalanced Iron Condor (short Puts and short Calls around 10 delta mark). If the index gets too close to its 50-day average, or falls below it, I will then use an Unbalanced Elephant as I have been doing recently, just to decrease the chances of being hurt too much on the Call side in the near future.  


Forex
The LT Trend Sniper system lost its long XAUUSD (Gold) bet after having reduced Stop Loss by 3/4. So, tiny loss.

Immediately after that, a long EURUSD signal was triggered. There was some initial progress and Stop Loss was caught in half. But since then, there hasn't been much follow through.

If you want to learn more about this fully automated trend following system, feel free to read this article.

Sniper's results tracked here.



Economic Calendar

The Calendar page has been updated to the new Economic Calendar offered by investing.com. This new version looks better and offers additional features, but be aware that it links to external sites beyond my control. In particular, I don't really love the "Start Trading" button, which links to a broker site, but I have no way to remove it. So, just use the Calendar as an information tool to learn about relevant upcoming events.

Monday: US Manufacturing. China's Manufacturing.
Wednesday: US ADP Non-Farm Employment Change. ISM Non-Manufacturing PMI. FOMC Statement and Interest Rate Decision.
Thursday: US Core Durable Goods and Pending Home Sales. European Central Bank Conference.
Friday: Non-Farm Payrolls, Unemployment Rate.

Good luck this week my friends,
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


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Saturday, April 22, 2017

Weekend Portfolio Anaysis (April 22, 2017)

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

Download Weekend Portfolio Analysis (2017-04-22).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 now available: Weekend Portfolio Analysis (April 15, 2017) 
Recent Trading Activity

- April SPX Credit Put spread expires for max gain of $960. This was part of an Iron Condor whose Call side had been closed a while ago. The entire history of the Iron Condor position is here.

- April RUT Unbalanced Lazy Elephant expires for max profit of $1,396. We never had any trouble with this position.

- Initiated a June RUT Unbalanced Lazy Elephant. As explained in the previous Weekend Analysis, I would go with Elephant instead of Condor if the indexes were not more than 1% higher than their 50-day average.

Friday, April 21, 2017

June 2017 RUT Unbalanced Elephant

Trade Details:

20 RUT 1220/1230 Credit Put spreads 0.66 Credit ($1320)
8 RUT 1470/1480 Credit Call spreads 0.92 Credit ($736)

plus

2/15 IWM 126/148 Unbalanced Long Strangle (.95 debit for the 126 strike Puts, .24 debit for the 148 strike Calls. Total debit paid: $550 )

Net Credit: $1506
Days to Expiration: 56

Saturday, April 15, 2017

Weekend Portfolio Analysis (April 15, 2017)

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

Download Weekend Portfolio Analysis (2017-04-15).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 now available: Weekend Portfolio Analysis (April 8, 2017) 
Recent Trading Activity

- No Activity. I tried to close the April RUT Unbalanced Elephant on Wednesday and Thursday but my closing orders never got filled. Knowing the low odds of being filled on the Call side, I decided to just try to close the Credit Put spread on Thursday, with the intent of leaving the Call side untouched as it is not a concern at all. So, I tried the Credit Put spread at 0.10 debit, no luck. Then 0.15 debit, nop. Nothing. I didn't want to sacrifice any more premium than that. I would have probably gotten filled had I tried 0.20 debit, but then I remembered we had a three-day weekend right ahead of us to strengthen the position even more via time decay and I decided to not rush it.

Tuesday, April 11, 2017

How has your trading style changed? Is there still potential for a +30% year?

I'm looking at your results in the previous years and am amazed by the impressive results in 2012, especially compared to those in later years. In terms of SP500, 2012 is also a good year, but isn't the best year (2013 has a significantly higher return). I'm curious to know how your strategies have changed from 2012 to today. Is it that you took on more risks in 2012 by committing more percentage of capital and/or staying closer to the money? Or is it just that the market condition was quite special in 2012 compared to other years (for example, no sudden rally or sell-off)? Or maybe something else? Basically, are the results from 2012 possible to replicate? - Jordan


Saturday, April 8, 2017

Weekend Portfolio Analysis (April 8, 2017)

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

Download Weekend Portfolio Analysis (2017-04-08).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 now available: Weekend Portfolio Analysis (April 1, 2017) 
Recent Trading Activity

- Initiated a May RUT Unbalanced Elephant on Monday. Net credit $1,416. All the details here. In the previous weekend analysis, the plan was to use an Unbalanced Iron Condor and yet I ended up playing an Elephant (the second one with May expiration options). I simply fear a rally. Yes, this is "personal bias" influencing my decisions and not being totally mechanical. I get that. But I think it is unavoidable after seeing rallies out of nothing, hurting us for so long. Because RUT is below its 50-day average, it has a lot of room to run. Playing the Elephant provides less credit (Could have obtained $2,200-$2,400 for the Unbalanced Iron Condor), but it is in exchange for upside peace of mind in that, we will have a winning position if the market rallies beyond what anyone expects, while the downside loss is similar to that of the Unbalanced Iron Condor. SPX was above its 50-day. I could have gone with an SPX Unbalanced Iron Condor, to stay loyal to the ideal of "one Unbalanced Iron Condor and one Unbalanced Elephant per month" (Read 2017 Trading Plan here), but the strike prices of choice would have added too much risk concentration in similar spots to those of the existing May SPX Elephant that was initiated almost two weeks ago. So, I definitely wanted to go with RUT.

Friday, April 7, 2017

May 2017 RUT Unbalanced Elephant

Trade Details:

20 RUT 1230/1240 Credit Put spreads 0.62 Credit ($1240)
 8  RUT 1450/1460 Credit Call spreads 0.93 Credit ($744)

plus

2/20 IWM 126/146 Unbalanced Long Strangle (0.74 debit for the 126 strike Puts, 0.21 debit for the 146 strike Calls. Total debit paid: $568 )

Net Credit: $1,416
Days to Expiration: 42

Note: A small account could have created a similar risk profile picture for example by playing a regular Iron Condor 1230/1240/1450/1460. Two contracts per leg, and adding 5 long IWM 146 Calls.

Monday, April 3, 2017

Options Trading Monthly Digest (March 2017)

Time to reflect Options trading results for the month of March. This update 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, April 1, 2017

Weekend Portfolio Analysis (April 1, 2017)

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

Download Weekend Portfolio Analysis (2017-04-01).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 now available: Weekend Portfolio Analysis (March 25, 2017) 
Recent Trading Activity

- Initiated a May SPX Unbalanced Elephant on Monday. Net credit $1,529. All the details here.