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BookingAlpha Option Trading Advisory

Saturday, June 17, 2017

Weekend Portfolio Analysis (June 17, 2017)

This week's analysis has been published at

Download Weekend Portfolio Analysis (2017-06-17).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The Weekend Portfolio Analysis will be available on this site next week for historical reference.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 Track Record page

Last Weekend Analysis now available: Weekend Portfolio Analysis (June 10, 2017) 
Recent Trading Activity

- Credit Put spreads (2250/2240) side of June SPX Unbalanced Iron Condor expired for max profit (+$1,140). Long SPY Put hedge expired worthless (-$98). Net-net it was a $1,042 profit. The June SPX Unbalanced Iron Condor is now entirely gone.

Market Conditions
(Click on image to enlarge)
Stochastics: 61 (Neutral. Down from 76 last week)
McClellan: +4 (Neutral. Down from +29 last week)
Stocks above their 20 DMA: 55% (Neutral. Up from 64% last week)

No man's land. The same condition we've seen throughout  the entire year.

Not my environment for individual credit spreads, but certainly for neutral positions such as Elephants or Iron Condors. Still looking at those lines in the uptrend channel as potential support and resistance. As long as price stays "organized" within those boundaries we will continue to do well.

For the second week in a row, oscillators are lower, yet the price of the index went up a little bit in respect with how it opened the week. So, albeit small, that divergence still persists. However, you've gotta give it to this market. Any half serious sign of weakness is usually bought aggressively in the afternoon and we haven't really had scary market closes in a while.

We also had the FOMC meeting this week and the interest rate announcement. It was so telegraphed that it resulted pretty much in a non-event.

Markets will correct 10%+ again at some point. But when that happens, it probably won't be triggered by information that is so expected in advance. Some readers have asked me, and rightfully so "then, why do you post an Economic Calendar at the end of your articles?". The answer is: certainly not in order to forecast any market move, but just for us to be aware of days where there is "potential" for more trading volume, some market directionality and perhaps more liquidity or sometimes poor liquidity depending on the nature of the event. Just check-points in time in case we have positions that may need to be taken care of, or in case you are planning to enter new positions and perhaps want to wait for "uncomfortable" days to pass. But rarely, will these economic events in the calendar cause catastrophic moves in the market. Rarely. Again, just an "awareness" tool.

Here's the Russell 2000:

(Click on image to enlarge)
Obviously weaker than the SPX and more sideways throughout the year. Also nicely respecting resistance and support boundaries for now. Yellow lines depicting the short strike prices of the July Unbalanced Lazy Elephant.

Current Portfolio

JUL SPX 2250/2260/2490/2500 Unbalanced Iron Condor
hedged to the upside with SPY 249 Calls
5 weeks to expiration. Net credit: $1,540.

(Click on image to enlarge)
Adjustment point to the downside: 2,320 (Close Put spread for a loss, deploy new spread at the 10 delta mark).
Defense point to the upside: 2,475 (Close Credit Call spreads at a loss, close SPY long 249 Calls for gains and deploy new farther out of the money Credit Call spreads, at the new 10-delta mark). So, it's looking better and not as uncomfortable as it felt 2 weeks ago. Profits are small so, defense lines far. Chances are it will continue to be held.

RUT/IWM - Jul 1310/1320/1500/1510/134/151 Unbalanced Elephant
Net Credit: $1,417. Five weeks to expiration.

Call side looking really comfortable, Put side not as comfortable but not in great danger at the moment.
(Click on image to enlarge)
Defense lines: 1,360 to the downside (adjust the Credit Put spread to the new 10-delta strike price), 1,475 to the upside (close all the Call options for a loss, no adjustments, just keep riding the Credit PUT spreads side). The T+0 line (pink) is showing a nice profit area to the upside so, zero concerns if RUT decides to rally.

Action Plan for the Week

- Close Call side of July SPX Unbalanced Iron Condor if SPX reaches 2,475. Also take the gains from the SPY 249 long Call hedges. Deploy new Credit Call spreads in the SPX 2,530 area, without doubling the number of contracts. Just playing the same number as in the original position, or if anything, just  a couple more. To the downside, SPX 2,320 triggers a Credit Put spread adjustment and it would be down to the low SPX 2,100's. This one looks highly unlikely.

- Adjust Put side of July RUT Unbalanced Elephant if the index falls to roughly 1,360. I'd be taking the 1320/1310 Credit Put spreads off the table at a loss and deploying new ones around 1,250 or lower (the presumed new 10-delta mark). To the upside, close all the Call options of the Elephant on a RUT trip to 1,475. No adjustments. The loss would be smaller than the Credit collected from the Put side. I believe with RUT currently at 1,406 an almost 5% rally in a week is very unlikely.

- As for new positions, I'll be looking to add the first August position by Thursday or Friday. The candidate for now is an SPX 2240/2250/2520/2530 Unbalanced Iron Condor. These strike prices as usual, may slightly change depending on market moves over the next few days, difficulty getting filled and prompting me to experiment with other strike prices etc. But that's the general idea. Of course, if the market suddenly reaches an oversold condition, then I would just go with an August Credit Put spread at ten deltas.

Economic Calendar

Tuesday: A couple of FOMC members speak.
Wednesday: Existing Home Sales. Crude Oil Inventories.
Friday: Manufacturing PMI, Services PMI, New Home Sales.

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 2017 Track Record

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