Recap Friday 7/26 and prep for Monday 7/28

Recap Friday:

Closed Trades:

GLD - sold the August 14 expiration 128/129 Call vertical -- closed out today by buying it back at our new stop.  I guess this makes sense in that the price of the underlying went up on Friday.  Seems that inverse relationship with the markets and the performance of gold is holding up. 

In any case, I'm glad I adjusted this Thursday night.  We did get closed out of it, but because the underlying went up putting the prices closer to my strikes, we would have lost money on the option contract.  So, closing win 1 this week.  Minimized potential losses.  (And, actually, I noticed a minor mistake in my math that I need to correct, and we wound up closing $3 up, in paper money of course!  But hey, it's $3 more than we had before.)

Here's a cropped snapshot of the candle chart from thinkorswim paper money (a part of TD Ameritrade) -- the platform we use for these trades:

Opened trades:

IWM - sold the August 14 expiration $116.50/117 call vertical -- got into it.  This gapped down on Friday, so our conditional order was definitely met.  I put the stops on Friday night per our rules, and I'm feeling fairly confident that we'll be able to ride out the next couple weeks and make money on time decay.  As I look at the chart, it looks like there are 2 levels of resistance that this will have to break to hit our strikes -- the 30 day moving average currently at $116.42, but before that, the $115.75 level.  

Of course we'll be watching this every night and monitoring it. 

Here's the thinkorswim chart from TD Ameritrade that I'm looking at -- zoomed in to roughly the past 3 weeks:

Ongoing trades:

AAPL -- sold the August 14 expiration 95/94.29 Put vertical -- after evaluating the current mark of the contract compared to my stop, I changed the loss stop to a trailing stop with at $0.10 trail.  Assuming that the option contract mark is still at $0.20 Monday morning when this goes on, the most we will lose is the 25% max loss per our rules.  However, if my understanding is correct, as the actual price of the option contract moves in a direction favorable for me (in my case down, so I can buy the contract back cheaper), the stop trail moves with it.  So has the mark hits $0.19, the highest my stop will go if this turns against me will be $0.29.  Basically, instead of manually adjusting my closing each night, this should do it for me.   We'll see if it works!

MU -- sold the August 14 expiration 32.5/32 Put vertical -- stock went down, but I want it to go up.  Unfortunately, it means that the contract price is closer to my stop side rule.  Here's hoping Monday it turns back around.  

Sunday 7/27 for Monday 7/28:

Nick did the research tonight for me.  I've got 4 different positions to evaluate and consider based on his findings.  Should be fun!  He's looking at the September expiration now as August is only 19 days.  (Our rules state 20-50 days window.)  Technically, we're not yet in that window as September expiration is still 54 days out.  But, let's see what happens.... 

QQQ -- Nick's proposing 2 different strategies here.  Selling a put vertical  and selling an iron condor.  The trend of this underlying is definitely up, but Nick thinks that there is a level of resistance at the $97.51 since it hit that high and bounced back down to a close lower than the opening, but still higher than the previous day, and then there was a small gap down for Friday's open. 

Guess we'll try them both and see what happens.  Wish us luck.  Things could be interesting on this...  

Selling September expiration Put vertical 94.63/93.63 -- which means we want the stock to continue to rise.  Since this is a strong uptrend, it should be fine.

Next is the iron condor -- again, selling the September expiration call sides 99.63/100.63; put sides 92.63/91.63.  So we want the price to stay in that window -- 99.63 on the high side and 92.63 on the low side. 

This will be interesting, I think.  Especially since I can't file them separately as they're all grouped under the QQQ line on my position statement.  Well, we'll see what happens.

GLD -- so that call vertical that we sold and were closed out of on Friday -- we're going to try that again for September though.  Let's see what happens!

Finishing thoughts for the night:

I'm over my limit of 5 trades a night in paper money, but that's okay.  Let's see how things go.  

I have a lot on my mind for work right now, so it's going to be a busy week.  Fun, I hope, but busy.

I'm reading Think like a Freak by Steven D. Levitt & Stephen J Dubner.  A friend of mine from work loaned it to me.  It's very interesting, much like the other Freekonomics books there have been.  I'll create a page for book reviews and add that later this week when I have it all finished. 

Happy Sunday to one and all!  Wishing great weeks to all.