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Good Afternoon!
Last week, we talked about how the charts were exhausted and said
At this point, I think we are seeing what we expected, a sideways market with a chance of it taking a "breather" by heading down for a pullback.
And right on queue, we got a small pullback on the daily chart which was enough to charge it back up over 50 and get it ready to go again. But, the weekly and monthly charts are still exhausted at or below 30, so the daily will be range bound with them until they charge back up.
I am not seeing a lot of great entries and opportunities right now. OIL has come down, but all of the volatility has come out of the options chains, so prices are not good enough to sell into. One trade that we can do is on WAC, it's comes down to it's low again and we have seen this pattern before. Right now, we can sell the Sept $2 put for $.35, an almost 20% return on risk. Because our cost basis is so low with the wins on this stock over the years, I am going to add some contracts, but it's very important to now that WAC report earnings on Tuesday, so we need defense on immediately. I am going to go through how we will do this in today's video and in the trades of the week below.
Have a great week!
p.s. I am always looking for feedback on this newsletter and how we can make it better, so please feel free to send it to me at
support@tenyeartrading.com.
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In today's video, we discuss the next moves in the market from this exhaustion point and set up a trade on WAC to take advantage of it being a low levels.
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Click below to see the 2016 Year in Review!
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March 2017
Naked Puts
Oil: We sold the Sept '17 $6 put for $.55 with 2 contracts. OIL came down and ended the week at $5.40. It is at a point where it will head back up.
AOBC Rollout: We rolled our Mar $22 put to the June $22 put for a credit of $.50. AOBC ended the week at $20.
Spread Trades
IWM Rollout: We rolled our IWM Mar '17 $136/146 put spread to the April $136/146 strikes for a credit of $.76. IWM finished the week at $135.75. If we can get it to drop a little lower or stay in this range for a few weeks, we should be able to exit this trade.
February 2017
Naked Puts
WAC: We sold the Sept '17 $3 put for $.60 with 2 contracts. WAC finished the week at $2.90 and we have an order in for defense.
MYGN: We sold the Feb '17 $18 put for $1.30. MYGN ended the week at $19.31. We rolled this out to Aug '17 and pick up another $1.00 of credit making our cost basis in the $15's.. We now have defense on.
VSTO: We sold the AUG '17 $22.5 for a credit of $1.75. VSTO finished the week at $21 and we now have defense on.
VSTO Defense: We bought the Mar '17 $17.50 put for $.15.
INSY: We sold the Aug '17 $6 put for $.75. INSY ended the week at $11.10. We now have defense on.
MEET: We sold the Aug '17 $4 put for $.45 with 2 contracts. MEET Ended the week at $5.10. We now have defense on.
MEET Defense: We bought the May '17 $3 put for $.10 as defense fo our AUg '17 $4 put.
Spread Trades
NVDA: We sold 2 Sept $75/70 put spreads for $.80 each. NVDA ended the week at $99.
WAC Defense: We bought 2 June '17 $2/1 put spreads as defense for our Sept '17 $3 puts.
DLTR: We sold the Sept $65/60 put spreads for $.85 with 2 contracts. DLTR ended the week at $75.
MYGN Defense: We bought the May '17 $14/13 put spread for $.15 as defense for our MYGN rollout.
IWM: We sold the $130/120 March '17 put spread for $.50. We will let this go to full expiration.
INSY Defense: We bought the May '17 $5/4 put spread for $.10 as defense fo our Aug '17 INSY $6 put.
January 2017
Covered Calls
WAC: We sold the June $5 covered call for $1.00. WAC ended the week at $2.90 and we have defense on.
Naked Puts
WAC: We sold the June $4 put for $.85 with 2 contracts. WAC ended the week at $2.90 and we have defense on.
SUN: We sold the June '17 $25 put for $2.60. SUN ended the week at $24 and we now have defense on.
SUN Defense: We bought the Mar '17 $20 put as defense for our June '17 $25 put.
Spread Trades
NVDA: We sold the June $80/75 put spread for $.90. NVDA ended the week at $99. We can buy this back already for $.60.
WAC Defense: We bought the Mar '17 3/2 put spread for $.10 as defense fo our June '17 $4 naked put. We can sell this for $.20 and will let it go for this week.
WAC Defense: We bought the Mar '17 3/2 put spread for $.10 as defense fo our June '17 $5 covered call. We can sell this for $.20 and will let it go for this week.
December 2016
Naked Puts
WAC: We sold the June $4 put for $.50 with 2 contracts. WAC ended the week at $2.90. We have defense on.
TASR: We sold the June '17 $20 put for $1.20. TASR ended the week at $23 and we have defense on. We can buy this back for $.70.
INSY: We sold the May '17 $6 put for $.75 with 2 contracts. INSY ended the week at $11.10 and we have defense on.
Spread Trades
WAC Defense: We bought the Mar '17 $3/2 put spread for $.12 as defense for our June '17 WAC trades using the 15% rule. We can sell this for $.20 and will let it go one more week.
TASR Defense: We bought the Mar '17 $18/16 put spread for $.15.
November 2016
Spread Trades
FB: We sold the June '16 $100/95 for $1.00. FB ended the week at $139. We have defense on and can buy this back for $.08.
FB Defense: We bought the March '17 $90/85 put spread for $.18.
AMZN: We sold the Apr '17 $675/770 put spread for a credit of $1.25. AMZN finished the week at $852. We have defense on and can buy this back for $.02.
Naked Puts
WAC: We sold the Mar '17 $ $2 put for $.30 with 2 contracts. WAC finished the week at $2.90 and we can buy these back for $.10 and will let them go to expiration.
Spread Trades
SSO: We sold the Mar '17 $60/55 put spread for $.84 with 2 contracts. SSO ended the week at $85.60 and we can buy this back $.05. We will let it go to expiration
June 2016
WAC Rollout: We rolled our Jun '16 $7 put to the Dec '16 $7 put for a credit of $.60. This puts our breakeven down around $5. We let ourselves get put the shares since we are close to breakeven and either let it run up from here or sell calls.
WAC Rollout: We rolled our 2 June '16 $10 puts to the Dec $10 put for a credit $.15 each putting our breakeven just below $8. We let ourselves get put the shares since we are close to breakeven and either let it run up from here or sell calls.
FIT: We rolled our FIT May $17 put to the Jan $17 put for a credit of $2.05. Our breakeven is now under $14 and FIT ended the week at $6 after getting hammered on earnings. We rolled this to the May '17 strike for $.20.
April 2016
Naked Puts
PLUG: We sold the Sept '16 $2 put for $.32 with contracts. PLUG ended the week at $1.10. We let ourselves get put the shares and will sell calls when it gets closer to $2
GPRO: We originally sold the April '16 $25 put for $2.20. We made another $1 from our defense putting our breakeven at $21.80. We rolled this out to the Jan '17 $25 strike for a credit of $.80. GPRO ended the week at $9.00.
February 2016
Naked Puts
VDSI Rollout: We rolled our VDSI Mar '16 $20 put to the Sept '16 $20 put for $1.15. This now put breakeven on our shares in the $15's. VDSI finished the week at $13 keeping us near breakeven. We got put the shares and can sell calls or sell the shares. We have a closing order in place.
November 2014
Naked Puts
EMES: We sold the March '15 $65 for $5.00. Emes finished the week at $15. If you remember, we rolled this out picking up another $3.15 to the June '15 strike. We have $8 in credit from our trades and picked up another $4 in selling out of defense. We rolled it again out to January 2016 picking up another $2.35, so breakeven is now around $50 on these specific shares. We rolled this our to Jan '17 and pick up another $.70 making breakeven overall on these specific shares $49.
In January '17. We allowed ourselves to get put the stock. Our cost basis on EMES all time is around $25, so we will sell calls and let it come up over time.
September 2014
Naked Puts
CRR: We sold the CRR March $60 put for $4.20. CRR finished the week at $12. Overall on our trades on CRR over the years have a nice profit. We received full profit on our defense and our breakeven is in the $50 range on this trade. We completed our rollout of this to the June cycle and picked up another $.85. As I have lamented in previous newsletters, this is the one trade of 2014 I wished I had waited on. I put it on too early in the drop in oil. We have more than made up for it with our previous trades on CRR over the years which has our cost basis below $30, but a lot of lessons learned in this trade.
We rolled our CRR trade out to Jan 2016 picking up another $1.75 making our breakeven below $50 (around $48) on these shares. We are rolled the Jan '16 to the Jan '17 $60 strike and picked up $.85. We allowed ourselves to get put the stock. Our cost basis all time on CRR is around $20, so we will sell calls as it comes back up.
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Closed Positions and Trade History |
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Trades of the Week for 1-8-17 |
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Stock Trades
VDSI: We have a GTC order in to sell our shares at $19.
Covered Call Trades
Put Trades
WAC: We will sell the Sept '17 $2 put for $.35 with 5 contracts.
WAC: We will buy 2 June '17 $1 puts for $.10 each - and will do this after we secure the WAc Sept '17 $2 puts.
Spread Trades
*All orders are setup as Good til Cancel (GTC)
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