Who wants to buy high and sell low? Why would anyone buy calls before the closing bell and sell them to someone for half price the next morning when the opening bell rings? When would anyone feel okay about buying for 88 cents and then selling for 45? Answer: When the calls are just a wrapper, a box designed to keep something else safe while in transit, like a shoe box protects the merchandise on the delivery truck so that your purchase isn't thrown on the porch one shoe at a time[...]
Before the paint was really dry I started tinkering with the reverse collar set up yesterday. The first thing I did, acting upon a suspicion (you could call it a wish) that the VIX would sift downward the next day (which is today, as I write this), is that I closed the short put. To recap the spread, it was as such, all of it opened yesterday, April 18th:
Shares of UVXY sold short at 19.48
Put for the April 21st expiration, 19.00 strike, sold short for 0.62
Call for the April 21st expiration,[...]
Every once in a while I have to try something new, and that means choosing something different from the menu and forgoing that same old tried-and-true sandwich. What sandwich am I talking about? My own trademarked "strangle sandwich, which is no one's favorite but my own. It's a doozy; it's not for all tastes, and it might just fail and make you sick (and sorry you tried it.) Let me tell you what it is before I tell you what I opted for instead, today:
I like premium, so[...]
While traders of nothing but the Essenpee would find themselves sitting on a gain of 1.5% to nearly 2% from February 14th through today (or through Friday, March 3rd's closing price, thus the difference between quotes), traders like me who favor TVIX or UVXY would be sitting right where they started, whether short or long. See chart below for a short history of UVXY over the last nearly-three-weeks.
My account performance shows a gain of several percent. How did I do that, when trading nothing[...]
Today's saga starts on January 24th, just two days ago but it seems like last week. I had just, the day prior, added to my core short TVIX position to raise the number of shares from 2,000 to 2,500 as you see in the portfolio graphic below. The price for that lot of 500 was $6.26. This will be revisited later in the post.
First, let's dispose of the TNA story. You'll see that standing out at the top of the graphic like the subject of a "which of these things is not like the[...]
The cliffhanger last time involved the $6.50 put for UVXY expiring this Friday, January 13th. I had sold twenty contracts on January 4th for premium received of $0.18 each. It turns out that I got nervous about this put when UVXY touched 6.57 later that day. I knew I had time, but I also believed that the nature of UVXY was not on my side, and I began plotting to trade out of these options and eventually replace them with more advantageous ones.
It turns out I didn't have to wait[...]
Yesterday, January 4th, in order to start out the new year with some degree of nail-biting (figuratively) drama, I hatched a little plan involving some short shares of UVXY. The first thing I did was to buy to close 400 shares, reducing the 1,800 I had opened the previous day to 1,400 in quantity. My plan was to re-short those 400 shares later in the day or on some upcoming day, along with 200 more which I envisioned as a day trade.
Then, thinking about the 1,400 short shares I still[...]
At my last writing I had taken an accounting-sheet loss by simply exchanging one security for a comparable one and then selling some options against that position with the intention of bringing in some extra return on that position. Refresher:
Converted to: (shown after just a few minutes as the position immediately resumed producing red ink):
Well, what happened to those during the earthquake that was election night and the days leading up to it? I said I'd report back on my bag of[...]
After having a pretty good week shorting anything with a ticker (no, not really - just a few select names) and getting away with it, I got caught with my shorts up on Friday afternoon. Who can predict green ticks higher than the Empire State Building that materialize while you're waiting by the microwave for coffee to warm? So I decided to transmogrify the offending position into a Frankenstein's monster of sorts, fitting for the candy festival otherwise known as October 31st.
Summer didn't draw to a close without telling us it was doing so. If any VIX-watchers were sleeping, they're awake now. Most of the summer seemed flat and long as a football field, and while that should've been easy, I made it difficult for myself by trying from July 19th onward to profit from something that simply wasn't happening just because I wished it and staked it out repeatedly: The return of any kind of volatility or at least the end of the silent, somnolent, stubbornly-immobile[...]
She sells short shares down by the SVXY shore... Or something like that goes the nursery rhyme. But does she buy calls to go with those shares? Probably not. Here's why I did it:
I wanted a chance to benefit from the SVXY downside I envisioned without worrying excessively about the potential penalty for being significantly unfortunate in my timing/prediction. So, feeling confident that my dream of SVXY put through the macerator would come true, I decided on a price I'd be willing[...]
The funniest part of my last post was the quote from my last sentence, "...VIX, which I doubt will stay the same every minute from here on out..." because it has basically stayed right where it was at the time of that writing more than a month ago. Spanning 11-13 that day set the tone for the next month, since that's all it's done ever since (with the exception of a toe dipped in 14 yesterday), for the next 25 trading days. (*And excepting today as I've been sitting here writing this,[...]
Little did I know how soon I'd be back to report on the status of the last line of my most recent post - specifically my declared hope/dream to be rid of the SVXY that became like a pebble in my shoe.
Yesterday (July 20th), when VIX scraped low in the elevens and SPX scaled a steep hill, I starting thinking about and fearing a future that might not include SVXY prices more attractive than those I was seeing point-blank. Biting the bullet and sweating through the pain, I sold all shares of[...]
If you can't wear shorts in the summer, when can you? At the time of my last writing, I was showing off a pair: TVIX and UVXY, which everyone knows are really just two legs of the same thing (for my purposes, anyway). Even though I had donned one leg before the other (I put my pants on one leg at a time, just like everyone else), I took them both off in one motion, as such:
But only one day later, my thoughts were consumed in the following manner:
From WikiHow's "How[...]
If it sounded like I had a little trick up my sleeve upon hastily closing my last post with a promise of quick and interesting updates, here's a confession: Yes, one typing hand closed the post while the other was closing my TVIX short (see detail below).
Crown jewel of June 21st, an otherwise lackluster day
Everyone who lived through it will agree that nothing in particular happened on June 21st, but somehow I got a little shaken up inside and decided it was a good idea to close[...]