March 22nd 2019

3/22/19

Weekly Recap and Look to Next Weekoptions trading strategies

We pretty well called this week in our summary lasts week. Had strength starting the week and then got the pull back we were looking for. We were a little surprised by the strength of the move up on Thursday but it did help our SPY trade that got signaled on Wednesday.

We watched the open today with great expectation after the strong move up Thursday. We half expected a gap up and then a pull back (which is why we did not short overnight even though we had a signal). As it turned out, we should have followed our signal and shorted. Not a big deal, there was just too much risk based on how the market has been acting lately.

Butterflys

We closed one of our butterflys for profit this week, probably should have let it run another day. We have another one that is showing a loss but should be fine as long as the stock does not rebound next week.

We wanted to get into another one today but the market selling off messed that off for us. Will look again next week.

Strangles

Closed our NKE strangle for a 3.86% loss because of earnings. We ended up with an expiration after earnings because we had to defend the trade a couple of times. Had to defend our MSFT strangle again. Today they all look pretty good.

The NKE loss was our first loss on a strangle this year.

Credit Spread – Index

Our NDX credit spread is showing a loss but half of that went away today. Still looks pretty good.

Iron Condor – Index

Entered into another SPX Iron Condor. We reduced the number of contracts this cycle because of how much we have struggled with these trades over the past 4 cycles. Only had one loss over those four trades but our gains were small as compared to our loss. Still trading these at a 80.5% success rate.

Diagonals

Tried to get into a couple of Diagonals this week. Only got filled on IBM.

SPY

Had two entries signaled for our SPY test strategy. We only took the first one on Wednesday. Ended up closing Thursday for a 23% profit. Should have taken the signal Thursday afternoon to go short but we felt the risk was just too high. Turned out we were wrong, this time. Still comfortable with our decision.

Straddle – Long

Trying out a new long Straddle strategy based on some statistical data. We have four positons we opened this week. Right now the group is profitable as a whole.

We really don’t like buying options, so we will have to see how this strategy goes. Buying these goes against our overall option trading strategy.

Delta

Our portfolio is show a Delta of negative 89.17. Mainly this is because of our NDX credit spread.

Next Week Market Prediction

What do we expect next week?

SPX has support at 2800, we are really looking for a long signal right now. The only think that is concerning is the length of the up candle yesterday and the down candle today are about the same size. Before the up candle SPX had two down days, so was the up move rejected and the overall direction changing?

We are not 100% sure, which is why we are not going long today even though we have a long signal. If today wasn’t Friday, we would probably go long but we aren’t comfortable waiting out the weekend.

We will lean toward the long side next week unless 2800 is broken. If it is, then we will just have to see what the week holds.

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