March 19th, 2017
Good Afternoon!

THANK YOU DEFENSE! That is all I can say after last week's WAC debacle. The good news is that our defense kept us in break even range. We can buy back our $2 puts that we sold last week for about $1.10. We got $.35 for the puts when we sold it and we have mutliple defensive trade including 3 June $2/1 put spread that we can sell for $.75 and the June $1 defensive puts that we can sell for $.30.

There are two very important lessons from this past week. First, the importance of making sure you do not deviate from your stategy in putting defense on every trade (even though 99% of the time we never use it). The second is that earnings periods are volatile periods and can either go really well or really bad for a trade.

WAC is a stock that we have played for a long time and thus have a cost basis of $0 for what we have on it, but for most trades this is not the case. What caused it to drop so much was a miss on earnings and then a barrage of lawsuits because of the stocks drop. We've seen this before with HLF (Herbalife) and LL (Lumber Liquidators) which have all bounced back and are doing well. We cannot predict what will happen with WAC and thus we need to back off in playing it until there is clarity of direction.

In the interim, I will be selling all of my defenses on the trades we have and exiting the ones like last week's trades where I can get out for breakeven including the credit from defense. The other shares I will hold and see if WAC comes up. It is your choice what you decide to do as for any shares you keep, you can continue to roll and collect cash on.

As far as the overall market, we are in the same position we discussed last week. The weekly and monthly charts are at exhausted levels and the daily chart is now charged back up and has a squeeze setting up on it. It will break out of that over the next week or so. I do not see much opportunity this week except for one trade on SUN. As I've stated before, this is a long term high dividend payer that I would be happy to own and hold for a long time if I were put the stock. I am going to add another position on it this week.

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.
This Week's Video

In today's video, we discuss the market energy, a new trade on SUN, and how we will handle our WAC trades.

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Current Positions
March 2017

Naked Puts

WAC: We sold 5 Sept '17 $2 puts for $.35 each. WAC finished the week at $1.10 after a nasty drop on earnings. We are going to exit these along with our defense for near breakeven. See this week's trades

WAC Defense: We bought 5 June '17 $1 puts as defense for our Septh '17 $2 puts for $.10 each. We can sell these for $.30 and will do so as part of our strategy to get out of the trades.

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 $138. 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 $1.10 and we have defense on..

MYGN: We sold the Feb '17 $18 put for $1.30. MYGN ended the week at $19.10. 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 $10. We now have defense on.

MEET: We sold the Aug '17 $4 put for $.45 with 2 contracts. MEET Ended the week at $5.15. 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 $106. We can buy these back for $.50.

WAC Defense: We bought 3 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 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 $1.10 and we have defense on.

Naked Puts

WAC: We sold the June $4 put for $.85 with 2 contracts. WAC ended the week at $1.10 and we have defense on.

SUN: We sold the June '17 $25 put for $2.60. SUN ended the week at $24.70 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 $106. We can buy this back already for $.30.

WAC Defense: We bought the Mar '17 3/2 put spread for $.10 as defense fo our June '17 $4 naked put. We let this expire for full profit

WAC Defense: We bought the Mar '17 3/2 put spread for $.10 as defense fo our June '17 $5 covered call. We let this expire for full profit.


December 2016

Naked Puts

WAC: We sold the June $4 put for $.50 with 2 contracts. WAC ended the week at $1.10. We have defense on.

TASR: We sold the June '17 $20 put for $1.20. TASR ended the week at $23.40 and we have defense on. We can buy this back for $.50.

INSY: We sold the May '17 $6 put for $.75 with 2 contracts. INSY ended the week at $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 let this expire for full profit.

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 $140. We can buy this back for $.08.

FB Defense: We bought the March '17 $90/85 put spread for $.18. this expired.

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.
September 2016
Naked Puts

WAC: We sold the Mar '17 $ $2 put for $.30 with 2 contracts. WAC finished the week at $1.10 and we let ourselves get put these shares as our cost basis is $0.

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
Naked Puts

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 $1.20. 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 $14 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.


Closed Positions and Trade History

To view the latest closed positions and historical closed positions from June 2013 to present, please click the link below and visit our trade history page.

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Trades of the Week for 3-19-17
Ten Year Trading Formula
Stock Trades

VDSI: We have a GTC order in to sell our shares at $19.


Covered Call Trades



Put Trades

WAC: We will buy the Sept '17 $2 put for $1.10 to exit them.

WAC: We will sell 5 June '17 $1 puts for $.30 each to take profits.

Sun: We will sell the Sept '17 $22.50 put $1.80.


Spread Trades

WAC: We will sell the June $2/1 puts spreads for $.75 each.

*All orders are setup as Good til Cancel (GTC)
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