Tue Jan 10

I shorted the Jan13 12 puts last Thur at an average price of 1.00. The stock was trading in the 12.50 area. Kicked out the trade yesterday at 0.30 for a .70 profit (out of a potential maximum of 1.00). I like these naked short-term put trades because of the forced time decay. Note that the stock is currently trading around 11.50 (one point lower than Thur) and the options are 1.00 bid. That’s an 8% adverse stock move with no change in the options. Another way to look at it, is that those few days provided a nice margin of error to re-evaluate the trade and exit without much pain. If I had not taken them off yesterday, I would have kicked them out for a scratch today.

Good trading!

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Mon Jan 9

Taking profits on majority of BOIL Jan 13 Puts (see prior post for entry). Average price sold was 1.00 with an offset of .30 this morning. Still like NG on the long side but with 70% of the profit potential realized, it makes sense to cash in.

Good trading!

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Sun Jan 8

Here are a couple of long ETFs to start the year with. They all have options and some weekly expirations. The market could get a lift with the inflation numbers next week (core MoM and CPI are expected to be flat). Powell will also be speaking at the Riksbank Symposium. There is still plenty of bullish sentiment (cashflows into ETFs and Q3 rally banter). I still see any decent rallies as short opportunities.

SLV, GDX, IAK, FEMS, XLF, VGLT

Good trading!

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Mon Nov 21

Equities are acting crappy. Could inflation pause? Sure but that’s not enough. Could it drop sharply? Highly unlikely. Yes EOY buying should still show up but it’s generally after the first two weeks in Dec (hence the option expiration). Buy side will dump their crappy stocks and then rebalance into desirable stock names to end the year with. I still think the real sell off comes early next year. With that in mind, I am sizing these put positions so that if they work, I get some $$ for my time. If they don’t, I’ll still sleep just fine at night.

Good trading!

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Tue Nov 15

As I mentioned in the last post, I am leaning bullish. PPI came in a bit better than expected this morning. CPI while still high, appears to be stalling. The Fed will likely hike another 50 basis points in Dec. Maybe pause after that or one more small hike. Now we get to stumble along while we wait for the past hikes to filter into the economy. While I think the short term looks slightly positive (equity-wise), I am still negative longer term.

I’m selling put spreads on EEM, SMH, and TQQQ. These are credit spreads (hence bullish). Spreads by definition are not the big winners but they can pay light bills.

Good trading!

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