FEB/MAR 09 trades

Put on a few postions yesterday (see pic). Some trades are closing existing trades or risk management. Put on a bearish bias SPY trade with pos vega, put on a slightly bullish QQQQ trade and a OIH trade for long oil spec. Also played a slighly bullish XLE vertical on. Oh yeah and a RUT iron condor for some good measure.
I wanted to have more of a positive vega exposure as the vix was at a support level and just was so unlikely that it would dip under the 40 mark. Well, today 1/14 Vix is up to the 50's again and if I was able to put the postions on with some more pos vega my losses would of been mititgated. taking a bit of a hit today as the market is all down 2-4% respectfully.

interest rate bubble play

this trade will give me a time cushion if I'm still early with the 20 year T-bill correcting.

To fund my 110 JUN09 put I will short puts in the front months.

1/09/09 update
mark is approx 112, so the direction has been in my favor and with true textbook performance my short Feb 110 put has been deflated by the vega decrease and my further dated long 110 put has stayed relatively the same. This has resulted with me being up $70+ and the standard deviation for Feb does not go outside my P/L graph on this trade, Im safe up or down 15% on this one. I also have rolling capabilities/options with this one. Great trade thus far. I will get out of the trade if I up 30% on risk.
1/13/09 update
mark is app. 113, up only 1 tick from last update but the vols have come in considerably doing some damage to this P/L graph. The biggest hurt is to my JUN 110 PUT the vols upon placing trade were trading at 37 today there at 29. My short put has offset some of that damage but the P/L graph has shifted from making close to $400 on max profit to now only making only half of that.

Take Away, mitigate the vol risk when placing contrarian trades, cause if you are right the vol will most likely go against you and take away some gains.

JAN08 Trade Log

SPY ratio IC trade with bearish bias, executed the trade 12/1/08
12/10 closed the call side out as my bias turned bullish short term.
closed call side out for a .16 loss (2)
12/17 closed out 1/2 of the put side for .09 = .13 (1) gain
trade balance is -.19 with 1 contract left on the put side 74/73 for .21
Trade will most likely be a wash...
take away: Because I was wrong initially I panic closed my call side and in hindsight I would of been better off keeping it on. Again another reason to be more mechanical in this market by setting a mental stop on the trade if it goes against you to this amount take this action if it works take profits at this amount. Adjusting this pre-set plan as the trade moves along must be done with a detailed rationale. Underlying methodology should be not loose more than 1.5x your cash flow or 1.5x your avg. gain on a trade, the idea being that you don't want your loosers to engulf your winners.

12/12
QQQQ and EEM IC trades are biased bullish for year end rally and or trading range: Q's trade was placed on 12/12 and the EEM was placed on 12/15 both are approx up 10%.
12/18
EEM mark25.47 ratio IC:
shaved off some pos deltas by closing out 1 of 3 EEM 21/19 put vertical for a +.19 profit, position is now a little more even on a p/l graph (lowered my downside risk as my opptimism is running thin for a year end blast!)
12/29 mark 24.11
closed postion for a total gain of $100 on $400 of risk or 24% Return.

QQQQ mark 29.91 ratio IC:
shaved off (1 of 1) 28/27 put vertical for a +.10 profit
still biased bearish but just reduced some downside risk in the trade.
Volatility has been vacuumed out over the past few days and has profited my pos theta I>C trades! off about 10points in the VXN or approx 20% to the 45 level, the vix is trading at the same price but has seen a larger % move down during the same period.
12/30 mark 29.35
closed out completely for a $82 profit or 23% return on risk ($350)

Light trading for Jan08 proved profitable as my negative vega, income postions blossomed with the vix/vols falling to the low 40's from the high 50's when placing the trades. Also the range has been tight letting my trades collect theta decay and vega premium drop.

DEC 08 trade log

DIA,
had an iron on with a butterfly blend at the downside.
11/25 closed out the short call sides netting $63 = %20 ROR / with 8 commission ($12)= +$51
Still holding the stretched out butterfly:
+1 78 put / -1 80 put / -1 81 put / +1 83 put
for .20 debit.

XLF / XLE
ratio iron condor concept to be long one and short the other. I was still heardly bearish on XLF as it broke under 10 and thought the sell off in engergy was over done! This lead to a short put vert in the XLE mark 42.5 and a short call vert in the XLF.
trade done with 2 point spreads for a total credit of .95
11/25 update
XLF posted a 3 day rally with strong upmove, even today with the markets trading negative XLF is showing some resilience. I thought I would get out b/f losses would over take the XLE potential to still make me money overall. XLF side closed for a -$.23 loss today the XLE side is still open trading at a .33 gain.
Will continue to hold the XLE vert till it trades at .10
12/8/08 mark 46.34 XLE
xle continues up move and fills my limit .10 btc order allowing for a .48 credit gain. Overall ratio trade closed for a .25 gain or 12.5% gain. commission account for 1/2 profits at .12

qqqq
traded a ratio ic biased bearish was able to yank it b/f dec started at 50% of max credit making 64$ on 260 risk

NOV 08 trade log

IWM trade consisting of verticals in NOV and DEC relied on a bottom putting most of my risk to the downside. Meaning I skewed the trade to have less risk if IWM jumped up and more risk if it failed to the downside. Just yesterday I was mildly profitable on this trade and actually have been for the past week or so, but of course greed kept me in against my rules of not holding a postion into expiration week. For this reason the extreme fluctuations of the gama cause deltas to swing wildly. I was to close to a downside threat and today nailed me only 2 days from expiration. I had to close out with a $74 loss ($45 commissions) being that if IWM dropped anymore my losses could quickly go to 200-300!
Takaway is to plan more decisevly and not trade into expiration week. IF i closed this trade Fri. last week I would have made a small $gain.

NYX slingshot NOV08 start

+100 shares @ 25.27
+1 long JAN09 25 put @ 3.95
-2 vertical DEC08 30/35 calls @.82 (2) credit

11/19 NYX mark 21.07
NYX along with the market is taking a bath, making dramatic lows:
I rolled the -2 vertical DEC 30/35 calls down collecting .58 (2) = +$116
initiated new -2 vertical DEC 25/30 calls for .82

11/20 mark 18.67
stc -1 Jan09 25 put @8.05 for a gain of 4.10
bto +1 JAN09 20 put @4.55

11/21 mark 17.08
btc +2 verticl DEC 25/30 for .31 for a gain of .51 (2) = 1.02
sto -2 verticl DEC 17.50/20 for .94

Nov expiration status
stock has accumulated massive losses of -$820
gains on DEC and JAN short delta hedge postions = +$628
postion as of NOV is down $192
currently holding 100 shares at 25.27
-2 short DEC call verticals 17.5/20 for .94
+1 long JAN 20 put for 4.55 debit
given the proactive rolling and hedging I have avoided $800+ in losses and mitigated it to only $200, below is a P/L graph for DEC expiration.

12/10
sold the Jan 20 put to capture the remaining premium as NYX is making a move upward. pulled out 1.13 of credit = -3.42 loss
gain total is 2.86 for hedge postions with -2 vertical dec 17.5/20 calls currently at max loss of 3.12 for 2 contracts.
12/15 mark 26.54
With NYX up above my original cost I am profitable in the trade. I will initiate the sling shot again for Jan expration in the next day or so.

As of 12/30 NYX mark $24.90
my hedging has been profitable by 5.17 (including the debit from the (+1) 22.5 JAN put @ an 0.88 debit current mark .74)
my original cost basis for the 100 shares is 25.27

AIG / SPY combo trade

9/16/08
AIG on the brink of bankruptcy or rocket up
SPY on the brink of a breakdown or rubberband like launch
bot +200 shares of AIG at 3.95

bot +1 SPY 122 PUT @4.50
bot +1 SPY 117 PUT @2.56
avg. 3.53

using spy as a hedge should be efficient as a AIG b.k. would mean a break down in the market (SPY).

scenario 1:
AIG goes b.k. US looses 116,000 jobs and the $1T in assets will be unravelled with God knows what kind of wrath.
I loose 3.95 x 200
I (should) win with the SPY atm and otm puts
The spy vix is at 30+ which allows for a large move, bigger than the cost of my 200 shares of AIG. That being said scenario 2 could be an easier win

scenario 2:
AIG gets funding and is re-established it finds its capitulation low and rockets back up 200% ++++
The spy can't possibly go down as many points as AIG can go up, therefore this scenario has the higher likelyhood of BIG profits.

scenario 3:
worst case is that the market finds some resolution and AIG gets some temporary reprieve some how or it doesnt rebound or fall as much as my Spy hedge therefore leaving me at a loss, the SPY vols will also influence the trade.

UPDATE 9/16:
in aftermarket trading the spy and aig contracts are trading in parity both down about 2 points.
Fed announced to offer the 85B to bail out and take 80% of the company

Update 9/17
next day market is slammed hard...UGLY!
SPY finishes the day making a new low..down $5.50 or 4.5%
AIG finishes the day down only 1.72 but equal to a 45% down move!
With respects to my trade this is a fantastic spread!
I closed out half of the postion and wait for maybe a furtherance of the move or sickening snap back, short covering explosion. This would possibly send AIG off to the moon while the SPY will not likely keep up with move creating a nice spread going the other way.

Trade results as of 9/17
200 AIG at 3.95 sold 100 for 2.12 = -1.83 (100 shares)
SPY 117 puts at 2.56 sold for 4.40 = +1.84 (100 share contract)
result is even...
WHY????
A 3.78 spread in the underlyings and a volatility boost in the SPY (helping my naked Put) didn't create a profit...
Well if I would of straight shorted the SPY and bought AIG this would of been true dollar for dollar, BUT b/c I bought 2 different put strikes and involved the greeks the deltas were not equal and therefore the moves didn't match up accordingly. If I were to of bought -200 deltas worth of SPY puts my outcome would of proven profitable.
Interesting lesson learned.
Lets look at the balance of the position as of the close today:
AIG at 2.03 = -1.92
SPY at 116.61 122 put at 7.75 = +3.25
You can see with the ITM put the deltas are more equal to the 100 shares of AIG and thus giving us a closer relation to the spread, also helping is the vega increase in the put contract.



*note AIG traded 1.2 BILLION shares today!!!

9/19
btc spy 122 put for 2.74 = -1.76 loss
AIG is currently trading at 5.39 = +$139
resulting in a unrealized loss of $40 or so.
I will continue to hold AIG throug this rockiness in hopes it will emerge and get back to double digits then close.

disclamer: this trade was a recommendation from 1option.com:
http://www.1option.com/index.php/global/comments/this_is_going_to_be_reolved_this_week_buy_aig_and_buy_spy_puts/

May08 wfmi earnings trade (+185 +308%)

5/13/08
bot +1 may 32 put @.60 with 3 days till expiration.
5/14/08
sold for 2.45
total gain +1.85 +308%
Whole Foods Market Inc. (WFMI) reports earnings for the fiscal second quarter on Tuesday (After Market Close). As much as I loved to shop when I was in Austin, TX, I would love to be wrong if they deliver good results. It has seen its double-digit profit growth starting to erode due to costs associated with opening new stores and to buy its smaller rival Wild Oats Markets. Now that the deal has closed, the company is facing costs for cutting Wild Oats jobs and increasing the wages and training of the Wild Oats employees.
Whole Foods is also facing a slowdown in consumer spending in the U.S. A loyal customer base should help but how much? There is a positive argument as well, that it’s customers might not have been yet hit by slowdown in consumer spending as they are little middle to high class. But how much moat? Margins might be squeezed as well…
This is from one of OPN subscriber-
Whole Foods is my favorite company on the planet, but everytime I go in I can clearly see a difference in the amount of people that are there and what they are buying. I usually let loose and buy everything in sight, but I’ve even tamed myself a bit. Rising food prices, lower spending and their tiny margins–plus the way other grocers have been doing….
The company has not offered any guidance for the quarter so it may work out in their favor (sort of). The estimates for the organic food grocer from First Call are $0.30 EPS on $1.89 billion in revenues. Next quarter estimates are $0.35 EPS on $1.96 billion in revenues. Estimates for fiscal Sept-2008 are $1.28 EPS on $8.27 billion in revenues. The company expects total sales to grow 25 percent to 30 percent for the year, with comparable store sales rising 7.5 percent to 9.5 percent.
I like bearish position on WFMI. And I like Wal-Mart (WMT) for exactly the opposite reason with a bullish bias.
Disclaimer- Pls do your own due diligence before investing. My past wins doesn’t mean this will be win as well. This is not a recommendation and directional trades are speculative by nature. You may lose your investment completely.

Profitable trading, OP

MVL may08 Spec (+40% +$200)

5-2-08
MVL spec trade based on Iron Man opening and earnings
5/5/08
closed trade for total profit of $200 profit or 40% profit
entered trade on Fri. 5/2 and closd monday 5/5 (holding period about 1 working day).
IV got crushed and worked in the favor of the put credit spread and price moved up %7+ pushing both spreads into positive teritory, recognized a %80+ return on the call debit spread.

MAY bidu butterflys

4/24/08
placed 3 butterflys on Bidu for earnings lottery ticket.
placed one ATM and the other two butterflys at the expected price move up/down.

total debit: 1.75

4/25/08
earnings came out and price is at my B/E point for the ATM buterfly (mark 358)
b/c the butterfly is flat vega my position wasn't subject to the deflating of IV's.