LTOptions at a 33% discount during the Year End Holidays.
Tell me More

BookingAlpha Option Trading Advisory

Sunday, February 25, 2018

Weekend Portfolio Analysis (February 25, 2018)

This week's analysis has been published at

Download Weekend Portfolio Analysis (2018-02-25).pdf

If the above link doesn't work for you, simply log in to, 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The Weekend Portfolio Analysis will be available on this site next week for historical reference.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 2018 Track Record page

Last Weekend Analysis now publicly available:
Weekend Portfolio Analysis (February 17, 2018) 
Recent Trading Activity

- Closed RUT March 1320/1330/1680/1690 Unbalanced Iron Condor on Wednesday for a $1590 profit.

- Initiated an April SPX Elephant on Wednesday. Net credit: $1608.

Market Conditions
(Click on image to enlarge)
Stochastics: 77 (Neutral. Neutral from 87)
McClellan: +103 (Neutral. Up from +71)
Stocks above their 20 DMA: 53% (Neutral. Up from 40%)

No man's land.

Price getting close to what for years was upside resistance.  Despite the fact that it was broken early in the year, it seems to be offering some sort of resistance again. Only time will tell. At the same time price is barely above the 50-day average, so there's room to move. Better environment for neutral plays rather than individual Credit spreads on one side of the market.

VIX above 16, it is still a good time for deploying Iron Condors and/or Elephants. The backwardation that prevailed in the VIX futures for a couple of weeks seems to be coming to an end. Peace ahead can only be good for our positions. I still think we won't suddenly go back to the endless times of VIX at 9. But between, say 14 - 17 for a while would be awesome.

The Russell Index:
(Click on image to enlarge)
No position at the moment in Russell. Showing some more upside potential than the SPX.

Current Portfolio:

The SPY Calls and SVXY Calls expire in December and January of next year. Same as the Synthetic stock position, which is equivalent to being long 200 shares of SPY, but needing much less buying power. The goal with all of them is to hold them for as long as possible. They may fail, of course, but they are calculated risks. All the SPY and SVXY Calls barely add up to seven thousand dollars. Or 7% of the original 100K portfolio.
The synthetic SPY stock position occupies decent room (13.8K), but since it is the same as being long stocks, there is no way to lose all that money. For example if SPX finishes the year at 2500 (SPY 250), it would be a 14 point loss (from artificially long stock at 264). So, 14 points multiplied by 200 synthetic shares would be a $2800 loss. A similar calculation can be done assuming SPY finishes the year at 240, 230 etc.
Let's now look at the income plays.

June. SPX 2025/2050 Credit Put spread
Net Credit: $1,320 and seventeen weeks to expiration
(Click on image to enlarge)
Defense line: 2250 (adjust the Put side). I'm happy closing it for roughly $1000 profit out of the max $1320 potential rather than waiting until June expiration.

Apr. SPX/SPY 2440/2450/2890/2900 - 290 Elephant
Net Credit: $1,608 and eight weeks to expiration
(Click on image to enlarge)
Defense line: 2550 (adjust the Put side). 2830 on the Call side (close for a small loss. Keep riding Put side, whose credit is greater than whatever loss the Call side suffers. I think I went a little too far with the SPY Long Calls. The T+0 line could have been a little flatter and lower. I would have less profits today, but this fight is just starting. I could have obtained a better overall credit in the $1800's if I hadn't hedged the upside too much. But, it is done and I'm not unhappy with the position.

Action Plan for the Week

1- Regarding the June SPX 2050/2025 Credit Put spread, there's no way I'm holding that for 16 weeks. Original credit per spread was 1.65. I'll gladly exit early for 0.40 debit, booking a 1.25 gain per spread ($1000 in 8 spreads).

2- I'll stay quiet this week, just riding existing positions. Next week, I'm planning to enter a RUT position, and for that I'd like to have liquidated the June SPX 2050/2025 for some margin and downside relief exposure.

Economic Calendar
A little heavy this week.

Monday: ECB President Draghi speaks. US New Home Sales.
Tuesday: Core Durable Goods orders. CB Consumer Confidence. China Manufacturing PMI.
Wednesday: Europe CPI. US GDP. US Pending Home Sales.
Thursday: ISM Manufacturing PMI
Friday: Non-Farm Payrolls. Unemployment Rate. Michigan Consumer Sentiment.

Take it easy folks.

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 2018 Track Record

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

No comments:

Post a Comment