I was finally able to sell my UVXY puts.

music selection:  “In-A-Gadda-Da-Vida” — Iron Butterfly

Back on 9SEP2015, I bought the five strike LEAP puts for UVXY at 1.40 a share.  Volatility spikes sent the position deeply underwater but it finally recovered.  Today, I sold the position for 1.59 a share.  The position was in force for 317 days and yielded 15.63% annualized.  I’ll admit to being “wrong” on the call this time.  But when your ‘bad’ trades yield almost 16% annualized you are doing pretty well.

I replaced the puts with UVXY180119P00004000 and paid 2.05 a share.  I’ll hold the position at least 30 days before selling so I’ll hold through the 1:5 reverse split.  The adjusted strike will be 20.

In other news, some positions expired today.  Puts on QCOM and MSFT expired out of the money.  I’ll reopen puts here on Monday.  Covered calls on LNG and DIS expired out of the money.  I’ll be rolling those positions as well.  A covered call on GSK finally expired in the money.  I’ll say goodbye to the shares and exit the position.

Devour your prey raptors!

Update UVXY puts

Never miss another opportunity to devour prey!

2 thoughts on “Update UVXY puts

  • July 23, 2016 at 5:06 pm

    I’ve read an awful lot about this trade, and I’d really like to try it out, but I guess I’ve just been skeptical because it seems like one of those too good to be true situations. Like how is this not the most crowded trade in the world? Who’s selling you these puts?

    I think I might wait until after the split to give it a try, just so I don’t have to do weird math to figure out where I’m at with the position. I know it doesn’t make a difference, but it’ll be easier for me to wrap my head around it I think.

    • July 23, 2016 at 10:01 pm

      For most options trades, your counterparty is the market maker. They hedge their position with the underlying and earn a sliver on the spread thanks to being able to execute faster than you can. It does seem to be too good to be true? But 16% return is the WORST I’ve ever done here. Good trades have been hundreds of percent annualized return. I can’t offer individual advice (that requires a license) so I’ll speak generically to all Raptors. You should always use good position sizing with all positions. Never bet the farm on any one trade. And for something new or speculative, use a half or third normal position size. It is important that you can sleep at night.

      I think the reason the trade isn’t crowded is most options buyers have a very short term mentality. They want front or second month contract. The LEAPs aren’t very attractive because they might take over a year to pay off. My most recent play in UVXY went almost a year (317 days).


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