trading weekly options for a living...

[WklyOptions]

Learning Points on my new FAS campaign.

Hi, T2W traders,

Just opened a new FAS trading campaign:

Sold to Open (-4) FAS Aug(16th) $94 Call @ (+$2.21)

Bought to Open (+4) FAS Oct(18th) $94 Call @ (-$6.83)

Net Debit (-$4.62) per spread

Initial Cost Basis = (-$4.62) per spread

Initial Max Risk = (-$462) x 4-Lot = (-$1848)

Plan: :smart:

(1) HOLD positions thru next week (unless Adjustment required).
(2) Buy To Close (+4) FAS Aug(16th) $94 Call if Ask < ($0.25).
(3) Look to roll out & up the short FAS Aug(16th) $94 Call - if extrinsic time value < ($0.25) when FAS hits $96 or higher.
(4) Campaign Duration = estimate between 1 week to 5 weeks maximum duration.

Regards,

WklyOptions

Hi, T2W traders,

I wanted to post a Lesson here on the above new FAS trade I just made. It is similar to the TNA trading campaign that is currently open. However the TNA campaign has a more volatile asset - and higher "difficulty" profile - as it only goes to the Sep(16th) expiry deadline. Less time = more focus required to monitor quick profit-locking opportunities/adjustments.

Okay - first let's buy a highly leveraged and volatile asset - FAS is a favorite of mine. Then let's insure that the entire campaign is exited no later than the Oct 18th expiry period.

(1) I purchased a new asset, FAS, 400 shares worth (when it was $94.34). This had a cash value of $37,736.00 (USD).
(2) Then I purchased an INSURANCE policy to guarantee that I will exit the FAS shares at $94 with insurance coverage thru the Oct 18th expiry deadline:
(a) Owning 100 shares + 1 at-the-money put = insured "married put" profile.
(b) Long 100 shares + 1 at-the-money put = 1 at-the-money call (synthetic equals). :whistling
(c) Using Calls as synthetic married put benefits: (i) leverage, (ii) exit Oct 18th max duration.
(3) The insurance policy thru Oct 18th expiry cost me net (-$683) per 100 shares or a total of (-$2732). This is the MAX LOSS for the 400 shares of FAS thru Oct 18th expiry.

Notice the LEVERAGE that was gained thru the Oct 18th expiry campaign deadline. I paid (-$2732) to control $37,736.00 of an asset. This is a leverage factor of (+13.8x)! :whistling

Next - I will be selling front week's call options against my insured asset. I'll try to keep track of the actual weekly income generated by this trading plan:

(4) At the start today, and thru next week's expiry, I sold (-4) FAS Aug(16th) Calls for (+$2.21) = (+$884) cash income into my trading account!
(5) IF - and a big one at that - can continue to generate weekly income of (+$800) or more per week, then should be able to get back the initial (-$2732) over the next 3-4 income-generating weeks.
(6) Reasonable Target Profit objectives for this type of campaign: anywhere from (+40%) or better - in 5 weeks or less. Obviously if doing better, can hold campaign to pursue even better profitability.

Then it is a matter of continuing to harvest weekly income by selling front week calls to capture its extrinsic time value! :smart:

Well, let's see what happens in the next 1-5 weeks (anticipated exit < 5 wks).

Regards,

WklyOptions

 

[WklyOptions]

Campaign Update - TNA diagonal call spread campaign

Hello, T2W traders,

Update on TNA campaign this morning (1108am ET):

TNA = $67.85

The short weekly $66 call is expiring today - and it has effectively no extrinsic time value. Received Trade Alert to roll it out and up - to generate new extrinsic time value to harvest for the following week: :smart:

Bought To Close (+6) TNA Aug2(8th) $66 Weekly Call @ (-$1.85)

Sold To Open (-6) TNA Aug(15th) $68 Weekly Call @ (+$2.07)

Net Credit (+$0.22)

Current Positions:

Short (-6) TNA Aug(15th) $68 Call @ (+$2.07)
($2.05-$2.09)

Long (+6) TNA Sep(20th) $66 Call @ (-$5.40)
($6.15-$6.30)

Initial Cost Basis = (-$3.29) per spread

Initial Max Risk = ($329) x 6-lot = (-$1974)

Current Cost Basis = (-$3.07) per spread

Current Max Risk = (-$307) x 6-lot = (-$1842)

Current TNA price action indicates possible bullish bias on the Hourly and Daily chart. The current call diagonal spread has a bullish bias - so it will be maintained for now.

Plan: :smart:
(1) Hold positions.
(2) Look to EXIT - Buy To Close (+6) Aug(15th) $68 Call if Ask < ($0.25).
(3) Look to Adjust - if TNA > $70.

Regards,

WklyOptions

T2W traders,

Just a brief update on the TNA diagonal call spread campaign. :|

TNA closed today at $70.75. The short TNA Aug(15th) $68 Call is priced at $2.63-$3.20. Currently there is NO EXTRINSIC TIME VALUE left on this Aug(15th) $68 Call option.

I anticipate an Adjustment Alert to be triggered tomorrow to roll out and up this short leg. The campaign must continue to have short front week options to extract extrinsic time value.

Current Positions:

Short (-6) TNA Aug(15th) $68 Call @ (+$2.07)
($2.63-$3.20)

Long (+6) TNA Sep(20th) $66 Call @ (-$5.40)
($6.95-$7.65)

Initial Cost Basis = (-$3.29) per spread

Initial Max Risk = ($329) x 6-lot = (-$1974)

Current Cost Basis = (-$3.07) per spread

Current Max Risk = (-$307) x 6-lot = (-$1842)

Current Liquidation Value (Mid-Price) = (+$4.38) at mid-price

From a technical chart perspective, there is some conflict between the Weekly (bearish momentum bias) vs the Daily/Hourly charts (mild bullish momentum bias). This conflict usually suggests ongoing trading range price action. There is Key Support at $67 and Key Resistance in the $72/$73 price zone.

I will update more if/when such an Adjustment is executed tomorrow.

Regards,

WklyOptions

 

[WklyOptions]

FAS campaign update - call calendar spread

Hi, T2W traders,

Just opened a new FAS trading campaign:

Sold to Open (-4) FAS Aug(16th) $94 Call @ (+$2.21)

Bought to Open (+4) FAS Oct(18th) $94 Call @ (-$6.83)

Net Debit (-$4.62) per spread

Initial Cost Basis = (-$4.62) per spread

Initial Max Risk = (-$462) x 4-Lot = (-$1848)

Plan: :smart:

(1) HOLD positions thru next week (unless Adjustment required).
(2) Buy To Close (+4) FAS Aug(16th) $94 Call if Ask < ($0.25).
(3) Look to roll out & up the short FAS Aug(16th) $94 Call - if extrinsic time value < ($0.25) when FAS hits $96 or higher.
(4) Campaign Duration = estimate between 1 week to 5 weeks maximum duration.

Regards,

WklyOptions

T2W traders,

FAS closed today at $97.67.

Current FAS positions:

Short (-4) FAS Aug(16th) $94 Call @ (+$2.21)

Long (+4) FAS Oct(18th) $94 Call @ (-$6.83)

Net Debit (-$4.62) per spread

Initial Cost Basis = (-$4.62) per spread

Initial Max Risk = (-$462) x 4-Lot = (-$1848)

The Short (-4) FAS Aug(16th) $94 Call is currently at ($3.45-$3.90). There is NO EXTRINSIC TIME VALUE in this short call leg.

The campaign will require to roll out and up from the short Aug call option to generate and lock in additional extrinsic time value. :idea:

Plan:
(1) Look to roll out & up on the short Aug(16th) $94 Call leg asap. Await expected Adjustment Alert to be triggered sometime during tomorrow's NYSE trading session.

I will update more tomorrow if/when the Adjustment Alert is executed.

Regards,

WklyOptions

 

[WklyOptions]

Closing out TNA spread campaign

Hi, T2W traders,

Elected to CLOSE OUT the TNA spread trade campaign for now - as the FAS campaign is requiring more attention (breakout out to the upside).

Exited TNA spread this morning at Net Credit (+$3.95).

Will go thru TNA Debrief of Result & Lessons later today after NYSE trading hours.

Regards,

WklyOptions

 

[WklyOptions]

FAS campaign - trade update - Adj on Short Call

T2W traders,

FAS making a move to the upside over past two trading days - now requiring some Adjustments:

(1) Rolled up & out the Short Aug(16th) $94 Calls to Short Aug4(22nd) $98 Calls for Net Debit (-$2.60).

Now will monitor FAS 15-min and Hourly charts for area to roll up the Oct(18th) $94 Calls to the $98 strike price level.

It is best to do this if/when FAS begins to consolidate and show lower time-frame weakness.

I will update the FAS campaign later today after the NYSE trading session.

Regards,

WklyOptions

 

[WklyOptions]

FAS call diagonal spread campaign - update on Adjustment

T2W traders,

FAS making a move to the upside over past two trading days - now requiring some Adjustments:

(1) Rolled up & out the Short Aug(16th) $94 Calls to Short Aug4(22nd) $98 Calls for Net Debit (-$2.60).

Now will monitor FAS 15-min and Hourly charts for area to roll up the Oct(18th) $94 Calls to the $98 strike price level.

It is best to do this if/when FAS begins to consolidate and show lower time-frame weakness.

I will update the FAS campaign later today after the NYSE trading session.

Regards,

WklyOptions

Hi, T2W traders,

Performed Adjustment on FAS diagonal call spread campaign:

Bought to Close (+4) FAS Aug(16th) $94 Call @ (-$4.48)

Sold to Open (-4) FAS Aug4(22nd) Weekly $98 Call @ (+$2.03)

Net Debit (-$2.45)

Current Positions:

Short (-4) FAS Aug4(22nd) Weekly $98 Call @ (+$2.03)

Long (+4) FAS Oct(18th) $94 Call @ (-$6.83)

Initial Cost Basis = (-$4.62)

Current Cost Basis = (-$7.07) :whistling

FAS remains in a wide trading range from $92 to the $100 price zone. However the bias remains mildly bullish.

The Long Oct $94 Call options will not be rolled up at this time. For now - a mild bullish bias (long net delta position) will be maintained.

Plan:
(1) HOLD positions.
(2) Look to manage the short Aug4(22nd) $98 Call leg if FAS > $100 or if the call option has Ask < $0.20.

Regards,

WklyOptions

 

[WklyOptions]

Debrief TNA call diagonal spread = (+20.6%) in 14 days

Hi, T2W traders,

Elected to CLOSE OUT the TNA spread trade campaign for now - as the FAS campaign is requiring more attention (breakout out to the upside).

Exited TNA spread this morning at Net Credit (+$3.95).

Will go thru TNA Debrief of Result & Lessons later today after NYSE trading hours.

Regards,

WklyOptions

Hi, T2W traders,

TNA has remained in a trading range between $66 and $72. This has helped the TNA call diagonal spread campaign some.

The campaign was closed early b/c the FAS trade needed a closer bit of monitoring and management for me. FAS has a stronger bullish trend bias but can reverse quickly given the skittish sentiment in the general marketplace.

TNA Summary:

Initial Cost Basis = (-$3.29) on 08/01/2014.

Final Cost Basis = (+$3.95) on 08/14/2014.

Net Gain = (+$0.66) per spread x 6-Lot = (+$396).

Return = (+20.1%) in 14 days.

Lessons Learned:

(1) The campaign was exited early b/c of the required greater attention and time to monitor and manage the FAS campaign. Lesson = ALWAYS focus and be aware of "if and when" - other positions or life's circumstances - require additional time, $$$, and attention/focus management!

When this occurs - ALWAYS reduce the # of open positions asap! A "distracted" trader mindset = "trading signal" to reduce open positions to only 1-2 maximum to allow for "task saturated" optimal performance capacity.

(2) Another reason to exit the TNA campaign = the Long Sep Call option was going to be seriously exposed to theta time-decay coming into < 30 days to expiry.

(3) Time to focus on FAS for now! Clear the mind off the TNA campaign! :clap:

Regards,

WklyOptions

 

[WklyOptions]

TNA closed campaign: (+20.1%) - NOT (+20.6%)

Hi, T2W traders,

TNA has remained in a trading range between $66 and $72. This has helped the TNA call diagonal spread campaign some.

The campaign was closed early b/c the FAS trade needed a closer bit of monitoring and management for me. FAS has a stronger bullish trend bias but can reverse quickly given the skittish sentiment in the general marketplace.

TNA Summary:

Initial Cost Basis = (-$3.29) on 08/01/2014.

Final Cost Basis = (+$3.95) on 08/14/2014.

Net Gain = (+$0.66) per spread x 6-Lot = (+$396).

Return = (+20.1%) in 14 days.

Lessons Learned:

(1) The campaign was exited early b/c of the required greater attention and time to monitor and manage the FAS campaign. Lesson = ALWAYS focus and be aware of "if and when" - other positions or life's circumstances - require additional time, $$$, and attention/focus management!

When this occurs - ALWAYS reduce the # of open positions asap! A "distracted" trader mindset = "trading signal" to reduce open positions to only 1-2 maximum to allow for "task saturated" optimal performance capacity.

(2) Another reason to exit the TNA campaign = the Long Sep Call option was going to be seriously exposed to theta time-decay coming into < 30 days to expiry.

(3) Time to focus on FAS for now! Clear the mind off the TNA campaign! :clap:

Regards,

WklyOptions

T2W traders,

Quick update and apology on Subject Line for previous post on TNA Debrief.

Subject Line had (+20.6%) - but it was (+20.1%) over 14 days.

This error also another "symptom" of my task-saturated trading mental capacity.

So all the more reason to only focus on FAS for now.

Regards,

WklyOptions

 

[WklyOptions]

FAS @ $102.39 - Weekly Options Campaign - New Adjustment Today

Hi, T2W traders,

Performed Adjustment on FAS diagonal call spread campaign:

Bought to Close (+4) FAS Aug4(22nd) Weekly $98 Call @ (-$4.50)

Sold to Open (-4) FAS Aug5(29th) Weekly $102.50 Call @ (+$1.81)

Net Debit (-$2.69)

Current Positions:

Short (-4) FAS Aug5(29th) Weekly $102.50 Call @ (+$1.81)
($1.73-$1.98)

Long (+4) FAS Oct(18th) $94 Call @ (-$6.83)
($9.30-$10.75)

Initial Cost Basis = (-$4.62)

Current Cost Basis = (-$9.76) :whistling

Chart & Position Analysis:

(1) FAS remains fixed in a bullish trend and momentum bias in D, W, and M time frames. This is confirmed by general bullish bias in the overall markets.

(2) The Short Front Weekly Aug4(22nd) $98 Calls were rolled out and up early. There was effectively zero extrinsic time value left to extract.

(3) The new Short Front Weekly Aug5(29th) $102.50 Call options generated new (+$1.81) in extrinsic time value.

Plan:

(4) HOLD positions for now.

(5) Adjust Short Call leg IF - FAS > $104. Consider another roll out & up adjustment.

(6) Buy to Close Short Call leg IF - ASK < ($0.15).

(7) Consider roll out & up of the Long Oct $94 Call options IF - see FAS basing and weakening along the lower time-frames.

I will continue to monitor and update as necessary. Thx!

WklyOptions

 

[WklyOptions]

FAS @ $106.36 - Weekly Options Campaign - New Adjustment Today

Hi, T2W traders,

FAS continues to remain bullish - today hovering at $106.36 zone. Time to adjust and roll out and up the short weekly call option:

Adjustment today:

Bought to Close (+4) FAS Aug5(29th) $102.5 Weekly Call @ (-$4.65)

Sold to Open (-4) FAS Sep1(5th) $106 Weekly Call@ (+$2.21)

Net Credit (-$2.44)

Current Positions:

Short (-4) FAS Sep1(5th) $106 Weekly Call @ (+$2.21)
($2.11-$2.40)

Long (+4) FAS Oct(18th) $94 Call @ (-$6.83)
($12.65-$14.95)

Initial Cost Basis: (-$4.62)

Previous Cost Basis: (-$9.76)

Current Cost Basis: (-$12.20) :whistling

Chart & Position Analysis:

(1) FAS and the general market remains in a bullish trend & momentum bias.
(2) Today's adjustment was done because the extrinsic time value has effectively deteriorated on the Aug5(29th) short $102.50 weekly call option. :idea:

Plan:
(3) HOLD positions for now.
(4) Look to adjust if FAS > $108.
(5) Look to Buy to Close the Short (-4) FAS Sep1(5th) $106 weekly call if Ask < ($0.20).
(6) Look to roll up the Long (+4) FAS Oct(20th) $94 Call if - FAS starts to indicate bearish weakness in the lower time-frames. :smart:

Thank you.

WklyOptions

 

[WklyOptions]

FAS $106.41 - Time to adjust campaign...

Hi, T2W traders,


Current Positions:

Short (-4) FAS Sep1(5th) $106 Weekly Call @ (+$2.21)
($2.11-$2.40)

Long (+4) FAS Oct(18th) $94 Call @ (-$6.83)
($12.65-$14.95)

Initial Cost Basis: (-$4.62)

Previous Cost Basis: (-$9.76)

Current Cost Basis: (-$12.20) :whistling

...

Plan:

(6) Look to roll up the Long (+4) FAS Oct(20th) $94 Call if - FAS starts to indicate bearish weakness in the lower time-frames. :smart:

Hi, T2W traders,

FAS now hovering at $106.40 - $106.45. S&P 500 had just closed > 2000 yesterday and markets at taking a breather (lower volume today).

However - the lower time-frames indicate some bearish momentum building. Hence time to adjust this FAS campaign:

Sold to Close (-4) FAS Oct(18th) $94 Call

Bought to Open (+4) FAS Oct(18th) $105 Call

@ Net Credit (+$8.10)

Current positions:

Short (-4) FAS Aug5(29th) $106 Weekly Call @ (+$2.21)

Long (+4) FAS Oct(18th) $105 Call @ (-$5.77)

Initial Cost Basis: (-$4.62)

Previous Cost Basis: (-$12.20) :whistling

Current Cost Basis: (-$4.10) :clap:

Chart & Position Analysis:

FAS longer-term continues to indicate bullish trend & momentum bias.

Plan:
(1) HOLD positions.
(2) Look to adjust out of the Short (-4) FAS Aug5(29th) $106 Weekly Call leg tomorrow.

Regards,

WklyOptions

 

[WklyOptions]

FAS campaign - mistyped error last post on Current Position (Short Leg)...

...

Current positions:

Short (-4) FAS Aug5(29th) $106 Weekly Call @ (+$2.21)

Long (+4) FAS Oct(18th) $105 Call @ (-$5.77)

Initial Cost Basis: (-$4.62)

Previous Cost Basis: (-$12.20) :whistling

Current Cost Basis: (-$4.10) :clap:

...

Hi, T2W traders,

The immediate last post had an incorrectly typed Short Leg for the Current Positions portion. The CORRECTED Current Position is shown here:

...

Current positions:

Short (-4) FAS Sep1(5th) $106 Weekly Call @ (+$2.21) [mis-typed as Aug5(29th)]

Long (+4) FAS Oct(18th) $105 Call @ (-$5.77)

Initial Cost Basis: (-$4.62)

Previous Cost Basis: (-$12.20) :whistling

Current Cost Basis: (-$4.10) :clap:

...

All else is accurate.

Have a great weekend!

Regards,

WklyOptions

 

[WklyOptions]

FAS $108.25 - time to roll out and up...

Current positions:

Short (-4) FAS Sep1(5th) $106 Weekly Call @ (+$2.21) [mis-typed as Aug5(29th)]

Long (+4) FAS Oct(18th) $105 Call @ (-$5.77)

Initial Cost Basis: (-$4.62)

Previous Cost Basis: (-$12.20) :whistling

Current Cost Basis: (-$4.10) :clap:

...

All else is accurate.

Have a great weekend!

Regards,

WklyOptions

Hi, T2W traders,

FAS continues to move up slowly but consistently = now at $108.25 zone. Time to roll out and up on the short weekly call leg:

Bought to Close (+4) FAS Sep1(5th) $106 Weekly Call @ (-$2.97)

Sold to Close (-4) FAS Sep2(12th) $108.50 Weekly Call @ (+$1.70)

@ Net Debit (-$1.27)

Current Positions:

Short (-4) FAS Sep2(12th) $108.50 Weekly Call @ (+$1.70)

Long (+4) FAS Oct(18th) $105 Call @ (-$5.77)

Initial Cost Basis: (-$4.62)

Previous Cost Basis: (-$4.10)

Current Cost Basis: (-$5.37)

Chart & Position Analysis:

FAS continues to indicate longer-term bullish trend and momentum bias. Currently the net FAS spread position is slightly bullish with delta (+14) per spread.

Plan:
(1) HOLD positions.
(2) Extract the extrinsic time value of the short (-4) FAS Sep2(12th) $108.50 Weekly Call option.

Regards,

WklyOptions

 

[WklyOptions]

FAS at $105.38 - tested support at $105 - time to adjust...

Current Positions:

Short (-4) FAS Sep2(12th) $108.50 Weekly Call @ (+$1.70)

Long (+4) FAS Oct(18th) $105 Call @ (-$5.77)

Initial Cost Basis: (-$4.62)

Previous Cost Basis: (-$4.10)

Current Cost Basis: (-$5.37)

Hi, T2W traders,

FAS tested short-term support at $105 this morning. It looks like possible trading range between $105 and $108 - IF it can hold at $105.

Time to adjust the spread:

FAS $105.38

Bought to Close (+4) FAS Sep2(12th) $108.50 Weekly Call @ (-$0.34)

Sold to Open (-4) FAS Sep(20th) $105 Call @ (+$2.50)

@ Net Credit (+$2.16)

Current Positions:

Short (-4) FAS Sep(20th) $105 Call @ (+$2.50)

Long (+4) FAS Oct(18th) $105 Call @ (-$5.77)

Initial Cost Basis: (-$4.62)

Previous Cost Basis: (-$5.37)

Current Cost Basis: (-$3.21)

Chart & Position Analysis:

FAS and the general market is showing a topping/consolidation pattern in the short-term time frames.

The current FAS calendar call spread position is a market-neutral bias.

Plan:
(1) HOLD positions.
(2) Look to buy back the short FAS Sep(20th) $105 Call if Ask < ($0.20).
(3) Look to adjust if FAS > $107.25.

Regards,

WklyOptions

 

[CostaKapo]

I enjoy your posts keep it up

 

[WklyOptions]

FAS campaign - Adjusted position with a Roll Up & Out...

Current Positions:

Short (-4) FAS Sep(20th) $105 Call @ (+$2.50)

Long (+4) FAS Oct(18th) $105 Call @ (-$5.77)

Initial Cost Basis: (-$4.62)

Previous Cost Basis: (-$5.37)

Current Cost Basis: (-$3.21)

Chart & Position Analysis:
...

Plan:

(3) Look to adjust if FAS > $107.25.

Hi, T2W traders,

FAS started its bullish move once again after a pause in the $105 - $107 zone. Towards the market close - the FAS campaign was adjusted by rolling out and up the short weekly call leg as shown:

Bought to Close (+4) FAS Sep(20th) $105 Call @ (-$2.89)

Sold to Open (-4) FAS Sep4(26th) $107 Call @ (+$2.69)

@ Net Debit (-$0.20) per spread

Current Positions:

Short (-4) FAS Sep4(26th) $107 Call @ (+$2.69)
($2.51-$3.05)

Long (+4) FAS Oct(18th) $105 Call @ (-$5.77)
($4.15-$5.05)

Initial Cost Basis: (-$4.62) per spread - initiated 8/8/2014

Previous Cost Basis: (-$3.21) per spread

Current Cost Basis: (-$3.41) per spread

Position & Chart Analysis:

FAS resumed its upside move again today - hitting the $107+ zone. This level was one of the Planned Adjustments described in earlier entries. It is always best to follow the Plan. :smart:

The FAS adjustment was to roll out and up the short weekly call leg. At this time the previous calendar spread is now rolled into a bullish diagonal call spread in alignment with the immediate recent FAS price action.

Plan:
(1) HOLD positions.
(2) Extract extrinsic time value of the Short (-4) FAS Sep4(26th) $107 Call option.
(3) Look to Adjust if FAS > $109 zone.
(4) Look to Buy to Close IF - FAS Sep4(26th) $107 Call Ask < ($0.30).

Nothing to do now - just let it continue to unfold however it will move!

Regards,

WklyOptions

 

[WklyOptions]

FAS @ $110.80+ = time to adjust again...

Current Positions:

Short (-4) FAS Sep4(26th) $107 Call @ (+$2.69)
($2.51-$3.05)

Long (+4) FAS Oct(18th) $105 Call @ (-$5.77)
($4.15-$5.05)

Initial Cost Basis: (-$4.62) per spread - initiated 8/8/2014

Previous Cost Basis: (-$3.21) per spread

Current Cost Basis: (-$3.41) per spread


Plan:

(3) Look to Adjust if FAS > $109 zone.

Hi, T2W traders,

The FAS price action remained strongly bullish today - and it headed straight over the $109 zone - actually well into the $110+ levels. At this point - the net position delta was no longer positive - meaning my position would be going against the ongoing trend.

So - it was time to adjust and roll positions again!

Adjustments:

Bought to Close (+4) FAS Sep4(26th) $107 Call @ (-$4.79)

Sold to Open (-4) FAS Sep4(26th) $111 Call @ (+$1.99)

Bought to Open (+4) FAS Sep4(26th) $113 Call @ (-$1.02)

Sold to Close (-4) FAS Oct(18th) $105 Call @ (+$7.82)

Bought to Open (+4) FAS Oct(18th) $115 Call @ (-$2.15)

@ Net Credit (+$1.85)

Current Positions: :whistling

Short (-4) FAS Sep4(26th) $111 Call @ (+$1.99)
($1.95-$2.08)

Long (+4) FAS Sep4(26th) $113 Call @ (-$1.02)
($1.06-$1.16)

Long (+4) FAS Oct(18th) $115 Call @ (-$2.15)
($2.02-$2.21)

Initial Cost Basis: (-$4.62) per spread - initiated 8/8/2014

Previous Cost Basis: (-$3.41) per spread

Current Cost Basis: (-$1.56) per spread

Chart & Position Analysis:

The FAS price action remained strongly bullish in trend and momentum bias. Since FAS kept going through the short call strike levels - it required multiple adjustments to prevent the diagonal call spread from becoming net negative delta - which would be a losing proposition in a rising trend!

This current adjustment had the following unique additions:

(1) The Oct long call was deep in-the-money. It was rolled up to become out-of-the-money to generate some realized profits to help offset the necessary adjustments.

(2) The short Sep4(26th) $111 Call is effectively at-the-money which was intentionally done to lock up and exploit the maximum extrinsic time value on a weekly option.

(3) A long Sep4(26th) $113 Call was added - to protect the entire spread position from being adversely impacted by a rising trend in FAS.

Now the combined 3-legged spread has a net delta of (+19) per spread. So - if FAS continues to head up - the position will actually increase in value.

If FAS declines - then short front week at-the-money calls will be maintained to further reduce cost basis.

As T2W traders can see - the Current Cost Basis is now only at (-$1.56). So it will be pretty "easy" for this position to become break-even or profitable in the next couple of weeks (as long as FAS continues to have some volatility especially).

Ok- any questions on the above adjustments and the new 3-leg spread here? :idea:

Regards,

WklyOptions

 

[WklyOptions]

FAS $104.90 - time to adjust short weekly call legs

Current Positions: :whistling

Short (-4) FAS Sep4(26th) $111 Call @ (+$1.99)
($1.95-$2.08)

Long (+4) FAS Sep4(26th) $113 Call @ (-$1.02)
($1.06-$1.16)

Long (+4) FAS Oct(18th) $115 Call @ (-$2.15)
($2.02-$2.21)

Initial Cost Basis: (-$4.62) per spread - initiated 8/8/2014

Previous Cost Basis: (-$3.41) per spread

Current Cost Basis: (-$1.56) per spread

T2W traders,

Today FAS move down hard again ending at $104.90.

Adjustment made today:

Sold to Open (-4) FAS Sep4(26th) $105 Call @ (+$1.44)

Bought to Open (+4) FAS Sep4(26th) $107 Call @ (-$0.61)

Bought to Close (+4) FAS Sep4(26th) $111 Call @ (-$0.09)

@ Net Credit (+$0.74)

Current Positions:

Short (-4) FAS Sep4(26th) $105 Call @ (+$1.44)
($1.40-$1.53)

Long (+4) FAS Sep4(26th) $107 Call @ (-$0.61)
($0.58-$0.64)

Long (+4) FAS Sep4(26th) $113 Call @ (-$1.02)
($0.00-$0.19)

Long (+4) FAS Oct(18th) $115 Call @ (-$2.15)
($0.43-$0.49)

Initial Cost Basis: (-$4.62)

Previous Cost Basis: (-$1.56)

Current Cost Basis: (-$0.82)

Chart & Position Analysis:

FAS has been in a strong downside move for the past three (3) trading days. The shorter-term time frames continue to indicate bearish trend and momentum bias.

Key Support is at $103.60 to $105. A close < $105 for 3 or more days will imply greater price erosion for FAS. Below the $103.60 zone - the next Key Support is in the $98 - $100 zone. :whistling

Plan:
(1) HOLD positions.
(2) Extract extrinsic time value of the Short (-4) FAS Sep4(26th) $105 Call leg.
(3) Look to adjust if FAS < $103 or if FAS > $106.50.

Regards,

WklyOptions

 

[WklyOptions]

FAS = $101.96 - time to Adjust and roll again!

Current Positions:

Short (-4) FAS Sep4(26th) $105 Call @ (+$1.44)
($1.40-$1.53)

Long (+4) FAS Sep4(26th) $107 Call @ (-$0.61)
($0.58-$0.64)

Long (+4) FAS Sep4(26th) $113 Call @ (-$1.02)
($0.00-$0.19)

Long (+4) FAS Oct(18th) $115 Call @ (-$2.15)
($0.43-$0.49)

Initial Cost Basis: (-$4.62)

Previous Cost Basis: (-$1.56)

Current Cost Basis: (-$0.82)

Hi, T2W,

FAS continued lower today - taking out the Key Support at $103. Next stop? Probably in the $98 - $100 zone. Time to Adjust again b/c the front week short call leg has time value only 10% of the initial credit.

Adjustment:

Bought to Close (+4) FAS Sep4(26th) $105 Call @ (-$0.17)

Sold to Open (-4) FAS Oct1(3rd) $102.5 Call @ (+$2.05)

Bought to Open (+4) FAS Oct1(3rd) $104.5 Call @ (-$1.17)

@ Net Credit (+$0.71)

Current Positions:

Long (+4) FAS Sep4(26th) $107 Call @ (-$0.61)

Long (+4) FAS Sep4(26th) $113 Call @ (-$1.13)

Short (-4) FAS Oct1(3rd) $102.5 Call @ (+$2.05)
($1.92-$2.30)

Long (+4) FAS Oct1(3rd) $104.5 Call @ (-$1.17)
($1.07-$1.22)

Long (+4) FAS Oct(18th) $115 Call @ (-$2.15)
($0.19-$0.43)

Initial Cost Basis: (-$4.62)

Previous Cost Basis: (-$0.82)

Current Cost Basis: (-$0.11) :clap:

Chart & Position Analysis:

The FAS time frames have remained decidedly bearish in trend and momentum bias. The next Key Support is in the $98 - $100 zone.

The current FAS campaign is near Break-Even at this time.

Plan:
(1) HOLD positions.
(2) Extract extrinsic time value of the Short (-4) FAS Oct1(3rd) $102.5 Call leg.
(3) Look to roll down the Long call legs - IF and WHEN - FAS begins to indicate consolidation in the lower time frames - at the Key Support price zone.

Regards,

WklyOptions

 

[CostaKapo]

Good posts, I employ a similar strategy only with the bull put spread. I will continue to read.