Seeping Matter

Eek – forgot to do the positions log last Friday, and now I have to pay for it by accounting for this huge market dip this week in last month’s activity.  Oh well.

AAPL:
Long 1 JAN11 100 Call

AEMD:
Long 17000 shares

AMZN:
Long 1 MAR09/JAN11 65/50 Diagonal Spread

CTSH:
Long 2 JAN11 15 Call

GLD:
Short 2 APR09 100/101 Vertical Call Spread
Long 1 JAN11 50 Call
Long 1 JAN11 75 Call

GME:
Long 1 MAR09/JAN11 25/20 Diagonal Spread

NOV:
Long 1 AUG09 20 Call

RIMM:
Long 1 JAN11 30 Call

SPY:
Long 2 MAR09 73/75/91/95 Iron Condor
Long 2 MAR09 74/76/90/93 Iron Condor
Long 2 MAR09 78/79/90/92 Iron Condor
Long 2 MAR09 78/80 Vertical Put Spread
Long 4 APR09 65/66 Vertical Put Spread
Long 2 APR09 70/71 Vertical Put Spread

UA:
Long 1 MAR09/APR09 12.5/25 Diagonal Spread

Net profit (loss) this month:  (9.8)%
Net profit (loss) YTD:  (4.7)%
Net profit (loss) lifetime: (40.5%)

See that word “Long” all over the place up there?  That’s why I lost money this month.  I had negative delta on SPY going into last month, but didn’t carry that negative delta over into the upcoming expiration, and now I’m paying for it.

This is correctable though, although probably not right away.  But I can start selling call premium on SPY, even though it is so low, to get my delta back to a good place.  Then we’ll see how the coming months fare.

AAPL:
Long 1 FEB09/JAN11 95/100 Diagonal Spread
Long 1 APR09 80 Put (remnant of strangle)

AEMD:
Long 15000 shares

CTSH:
Long 1 FEB09/JAN11 20/15 Diagonal Spread

GLD:
Short 2 FEB09 86/89 Vertical Call Spread
Long 1 MAR09/JAN11 90/50 Diagonal Spread

GME:
Long 1 FEB09/JAN11 25/20 Diagonal Spread
Long 1 JAN11 20 Call

GOOG:
Short 1 FEB09 340/350 Vertical Call Spread

NOV:
Long 1 MAR09/AUG09 25/20 Diagonal Spread

RIMM:
Long 1 FEB09/JAN11 40/30 Diagonal Spread

SPY:
Long 2 FEB09 76/79/96/98 Iron Condor
Long 2 FEB09 80/83/92/88 Iron Condor
Long 2 FEB09 80/85/92/88 Iron Condor
Short 6 FEB09 87/91 Vertical Call Spread
Long 2 MAR09 78/80/90/93 Iron Condor

UA:
Long 1 APR09 25 Call

This month profit (loss): 5.6%
Year-to-date profit (loss): 5.6%
Lifetime profit (loss): (34%)

That big negative loss over the lifetime still haunts me, but that’s two straight months of profit when the market has been generally down. I don’t want to jinx myself here though, so let’s just leave it at that for now.

AAPL:
Long 1 JAN11 100 Call

AEMD:
Long 8000 shares

CTSH:
Long 2 JAN11 15 Call

FSLR:
Short 2/1 DEC08 110/115 Backratio Spread

SLV:
Long 100 shares

SPY:
Long 2 DEC08 68/69/106/109 Iron Condor
Long 2 DEC08 68/69/106/108 Iron Condor
Long 2 DEC08 78/79/97/99 Iron Condor
Short 2 DEC08 85/87 Vertical Put Spread
Long 2 DEC08 84/86 Vertical Put Spread

UA:
Long 1 APR09 25 Call

This month profit (loss): (9.2%)
Year-to-date profit (loss): (38.9%)

Some adjustments I’m going to make:

• Not going to do backratio spreads any more, at least not for a while. They consume too much cash.
• Need to monitor the long positions a bit closer, to figure out how to sell premium against them.
• Need to be thinking about when to get out of the UA call.

All in all, even though I’m still going down, I’m not unhappy about this yet. I mean, I’m not really that happy with it either, but the bulk of my position is in SPY, and so far it is looking pretty positive for December expiration.

I’ve kinda given up on logging each transaction, it is a lot of work. Here’s the current positions:

AAPL:
Short 2 NOV08 75/85 Vertical Call Spread
Short 2/1 NOV08 120/125 Backratio Spread
Long 1 NOV08/JAN11 125/100 Diagonal Spread

AEMD:
Long 7000 shares

SPY:
Long 2 NOV08 82/84/123/125 Iron Condor
Long 2 NOV08 86/88/114/115 Iron Condor
Short 2 NOV08 105/107 Vertical Call Spread
Short 2 NOV08 106/108 Vertical Call Spread
Short 2 NOV08 110/111 Vertical Call Spread
Short 2 DEC08 97/99 Vertical Call Spread
Short 2 DEC08 106/108 Vertical Call Spread

UA:
Long 1 NOV08/APR09 25 Calendar Spread

This month profit (loss): (5.1%)
Year-to-date profit (loss): (32.7%)

Those numbers don’t look very good, but they really don’t tell the whole picture. A couple of weeks ago, the this-month loss was at around 13%. This have been turning around the latter half of the month, and we are starting to come back.

To put it another way, I think last month’s strategy was sound and paying off. Record highs in the VIX allowed me to leg in, a vertical spread at a time, into some very wide iron condors on SPY, and I have managed to turn my delta around to a better number.

Next month will be telling, so we’ll have to watch carefully and see.

DISASTER! Who can figure out what securities are going to do when the US government selectively bails out, or doesn’t bail out, companies at their own discretion and whim? Arrgh.

I’ve fallen a bit behind on recent transactions, so I’ll just do the monthly position update, and forward strategy.

AAPL:
Short 2 NOV08 75/85 Vertical Call Spread
Short 2/1 NOV08 120/125 Backratio Spread

AEMD:
Long 6000 shares

FSLR:
Long 4/4/2/2 OCT08 185/190/230/260 Iron Condor

GLD:
Long 1 JAN10 85 put

RIG:
Short 2 OCT08 100/110 Vertical Put Spread
Short 5 OCT08 115/120 Vertical Put Spread
Short 2 NOV08 95/100 Vertical Put Spread

SPY:
Long 2/2/4/4 OCT08 110/112/130/132 Iron Condor
Short 2 OCT08 116/123 Vertical Put Spread
Short 2 OCT08 119/125 Vertical Put Spread
Short 2 NOV08 123/125 Vertical Call Spread

UA:
Short 2 NOV08 35/40 Vertical Call Spread
Long 1 APR09 25 Call

This month profit (loss): (24.73%)
Year-to-date profit (loss): (29.08%)

This month’s strategy:

1. Keep last month’s #1 – Greater focus in fewer positions. I forgot this a bit, still need to try to focus more.
2. Buy in on strong upward indicators for Rule #1 stocks. Sell diagonals against the call options to fund the transaction over the long term.
3. Adjust SPY strategy so delta is in better harmony with sentiment (bearish).
4. Don’t force any positions. Cash is king. Great opportunities are going to come soon, and I want to be prepared to take advantage.

The stock market is the definition of fair-weather friend. I looked to be ready to post a modest but reasonable gain for August, when suddenly a week’s worth of weirdness took away some $4000 of my portfolio’s value.

Anyway, here’s the positions as of September 2.

AAPL:
Long 3 SEP08 145/150/185/190 Iron Condor
Short 3 SEP08 185/190 Vertical Call Spread
Short 5 OCT08 155/160 Vertical Put Spread
Long 2 JAN10 150 LEAP

AEMD:
Long 5000 shares

BIDU:
Short 1 SEP08 380/390 Vertical Call Spread

FSLR:
Short 1 SEP08 250/260 Vertical Put Spread

GME:
Short 2 SEP08 35/45 Vertical Put Spread

GOOG:
Long 1 SEP08 460/480/510/520 Iron Condor

RIG:
Short 1 SEP08 120/130 Vertical Put Spread
Short 4 SEP08 125/130 Vertical Put Spread
Short 5 OCT08 115/120 Vertical Put Spread
Long 2 NOV08 120 Calls

RIMM:
Long 2 OCT08 125/130 Strangle

SLV:
Long 400 shares

SPY:
Long 5 SEP08 123/124/131/132 Iron Condor
Short 3 SEP08 123/124 Vertical Put Spread
Short 2 OCT08 120/125 Vertical Put Spread

UA:
Short 2 SEP08 30/40 Vertical Call Spread

USO:
Short 2 SEP08 91/93 Vertical Put Spread

XLF:
Short 2 SEP08 22/24 Vertical Call Spread

This month profit (loss): (5.93%)
Year-to-date profit (loss): (5.85%)

This month’s strategy:

1. Greater focus in fewer positions. I’m too spread out. I was trying some new things, but they backfired on me quite a bit.
2. Trade indicators on Rule #1 stocks. I need to construct positions that I can exit if the indicators turn to sell. This leads to:
3. Favor even-numbered positions, so I can close out half if I’m wondering if it is time to exit.
4. When buying options, always buy at least six months out. I’m getting beaten up on what would otherwise be potentially good strategies because I’m not paying attention to my time frames.
5. When there is nothing left to do, trade SPY. Don’t try to force trades or enter into additional positions.

Disclaimer

Without disclosing amounts I’m going to list positions I’m in as of the start of each month. At least I’m going to try. Then I’ll see how that plays out in terms of a return on a per-month basis.

AAPL:
Short 2 AUG 155/160 vertical put spread
Short 3 SEP 145/150 vertical put spread
Long 2 JAN10 150 LEAP
I’m generally bullish on AAPL, although I need to do a better job of trading the near-term fluctuations.

AEMD:
Long 5000 shares
AEMD is my swing-for-the-fences play.

AOB:
Long 4 JAN10 5 LEAP
Got a buy indicator on AOB. Plan is to start selling spreads on the fluctuations.

BIDU:
Short 1 AUG 300/310 vertical put spread
Short 1 SEP 380/390 vertical call spread

FSLR:
Long 1 AUG 240/250/280/290 iron condor

ISRG:
Short 1 AUG 260/270 vertical put spread
Long 1 JAN09 250 LEAP

RIG:
Short 1 AUG 155 call
Short 2 SEP 125/130 vertical put spread
Long 1 SEP 145 call
Long 1 JAN10 145 LEAP
The long SEP 145 call is the remainder of a straddle I did at 145. RIG then moved down significantly, and I sold the 145 put for nearly the whole sum of the cost of the straddle. I’m planning to hold the 145 call through earnings. RIG tends to kill on earnings.

SLV:
Long 150 shares

UA:
Short 2 AUG 22.5/25 vertical put spread
Long JAN09 20 LEAP

I’m also in iron condors in DIA and SPY that are autotraded by Red Option. Out of respect to Red Option I won’t disclose those positions.