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Monday Trades

Three positions expired over the weekend.

music selection:  “You know what the night can do” — Steve Winwood

weigh-in:  197.6 (0.8)

The first of my positions that expired out of the money over the weekend was my covered put against a short position in Ford (F).  Overall, the trade is in the red.  I still expect the credit cycle to turn and cause subprime lending to evaporate.  That will absolutely crater this company’s sales.  I sold F180817P00010000 for 6 cents a share.  The trade will be in force for 75 days and yields 2.67% annualized against my cost basis of 10.96.

Next is GrubHub (GRUB) which is a diagonal call on which the short leg expired out of the money over the weekend.  I sold GRUB180713C00125000 for 50 cents a share.  The trade will be in force for 40 days and yields an expected 6.37% against my cost basis of 71.60 on an annualized basis.  To date, the trade is up 1,528.

Finally, there is Skyworks (SWKS) another diagonal call on which the short leg expired out of the money over the weekend.  I sold SWKS180720C00110000 for 50 cents a share.  The trade will be in force for 47 days and yields an expected 6.10% annualized against my cost basis of 63.70.  So far, the trade is down 2,330.

Devour your prey raptors!

{ 3 comments… add one }
  • chomper June 5, 2018, 4:56 pm

    Velociraptor, you might find this data interesting:

    https://www.zerohedge.com/news/2018-06-05/smart-moneys-bailing-market-complacency-surges

    “The Smart Money Flow Index (SMFI) is a leading-indicator in markets. That means when the SMFI drops sharply, usually the equity markets are right behind it.

    And we haven’t seen the SMFI drop this much since the Great Recession of 2008 and the 2001 Recession. . .”

  • Chris B June 5, 2018, 5:19 pm

    I’ve been treading water with covered calls lately. Seems like premiums and spreads are too low to justify the risk of being an option seller. My most interesting ideas are to take on bearish exposure to struggling-in-the-best-of-times companies like JCP, LC, or SHLD, to establish more index collars, or to run bull spreads on GLD. Timing presents an enormous challenge here. A recession could be just around the corner or it could be 4 years away. Bear market lotto tickets like UVXY calls or index puts seem expensive relative to the price of selling away upside, so perhaps I’ll replace some of my SPY shares with SPY long calls and earn back the lost dividends with short term treasuries.

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