Hello Traders

   I hope everyone is having an awesome weekend! I have been hard at work updating my website to change up the portfolios a bit and introduce a new strategy. Today I will be giving you a quick update on all the open positions in the Index and Stock Option Portfolios.

   I am still working on exactly how I am going to share my volatility trading strategy. I will be making at a minimum a new subscriber section in the newsletter area of the website.  You will see that I have basically combined everything else I used to to into two other strategies. One that will remain focused on indexes and that includes sectors as well. So, you will see Russell trades via IWM, but you could also see that I am trading XLF of the Financial Sector as well.  The other will be the individual Stock Strategy where I will have directional bets, vertical spreads, naked options, etc.

   I will be adjusting how I am going to track performance of each of the sections. In reality it is all about making money and it will be more reflective of that versus how they are trading in relation to an index. There are many other statistics that I like to observe and will most likely include those as well. Obviously, if you are a member that is getting the trades you are going to know exactly how I am doing and all my realized trades will be updated in the statistics and performance of the portfolios.

Open Positions:

Index Options Strategy:

IWM, NUGT, OIH, TBT, UNG

UNG - Covered Call Strategy - Index - Sector Positions
UNG- Covered Call Strategy

This has moved down over the last 2 days. I rolled down the covered call to again try to exit the last 100 shares. Sold the calls near the money today at the 8 strike expiring on 10 FEB for a credit of $0.18. Plan is to exit this trade. I have been selling calls and selling calls, and ready to move on.

Positions in IWM
IWM – Short overall with 2:1 Call:Put Iron condor and short 136 Puts

This position has tested the downside at about 133 again, got a little bounce on Tuesday, and with AAPL beating earnings and if oil holds we probably will push higher again. This remains the biggest hedge against my large short volatility position.

Positions in NUGT
Long Gold Via Long Calls in NUGT

This has move up to about 11 again and is making the calls profitable. I will be looking to hold on for the ride into the FED announcement at 2 PM Wednesday. If the dollar continues to slide with the FED announcement this thing could really get a good push to upside. This is a hedge to any downward press in the market as a fear trade. Sounds like two pretty good reasons for a bounce.

Positions in OIH
Long Overall – Stock with Covered Calls

Rolled out and down one of the covered calls to 33.5 since it has pulled back over the last few days. Expires 17 FEB 17. I currently have 200 shares and have been selling calls over and over against this. Stock basis is 30, and I have to do some back calculations to see how much I have lowered the overall basis with all the call selling. I have been doing it for over a year starting with selling puts to get the 300 shares and only called away 100 shares so far, and rolled repeatadly with he covered calls. Most likely will continue with oil in a range.

Positions to Short Bonds via Long TBT
Short Bonds – Long TBT stock and short Calls

Short bonds still looks very attractive. I have continued to roll the covered position and have took heat several times on the calls, but have rolled them out and continue to lower basis as we trend between 39 and 43 since November when it moved up, prior to that was a range of 30 to 34. Going to keep this up and if we break 43 will see if I can take a ride to the next level and then sell calls again.

Stock Options Strategy:

AAL, AZO, TWTR

Positions in AZO - Short Overall
Short AZO – Short Via Short Call Spreads

This stock remains under pressure, but has held the 720 level. It did break below so an intraday low was established but closed above. this is a triple bottom and like the bubble shows there is serious competition now. I am holding the spread positions and they are up nicely now and will enjoy some time decay at this point.

Positions- Long TWTR Via Calls and Vertical Call Spreads
TWTR- Long Overall with Calls and One Third of position in a Call vertical spread.

TWTR has popped up and the short vertical call positions are taking some heat with he move above 17 today. I have the long dated calls much higher and will close the calendar vertical if we continue higher into Wednesday and just be long calls until we get into earnings.

Positions- Short AAL Via Short Call Spreads
Short AAL – Short Call Spreads to Short AAL

This continued to break down and I am out of the spread. Covered the short calls for $0.05 and left the long calls as a lottery ticket. No real value left in the long calls unless we can pop higher which I find highly unlikely with the transports performing poorly right now.

The Bottom Line:

I started this update on my positions Sunday. That is why we have the charts from then and the updates are from Tuesday following the market. I am working on a new list of potential trades and extensively working on my website updates. Target for the website is to get current year performance posted from Jan 1 at a minimum for all to observe my trading results. Look for my next update coming soon. Lastly, I will be getting back to live trading posts very soon following the completion of my website updates and making a new subscriber section that will have the Volatility Strategy exclusively.

Option Coach

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