Calls and Puts for Income Message Board

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Strategies & Market Trends : Calls and Puts for Income

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To: Keith J who wrote (5778)	8/29/2013 1:52:35 AM
From: Robohogs	Read Replies (2) of 5891

Interesting Keith. I had 70 of those SLCA myself and closed out Monday for 15 cents while also closing $25 calls then feeling pressure for 30 cents. Even after Tue/Wed fun, the pricing would have been much better today saving between a nickel and dime but I needed fast capital to hit target liquidity (which I hit before giving up 2/3 of it on Tuesday). I just played games with acct today shifting positions between accts and beginning loss taking on LCC puts ATM but way out in time, and with gains, I am at 70% of target liquidity but with 4-5 clear path solutions to get to 120% of target if needed (MCP adjustments, GDP closings, more LCC, weeklies in 2-3 names, etc.). On closing early vs. going to expiry I can honestly say I have found both ways can be good and both can leave money on table. I have honestly lost 6 figures not closing out short calls with 2 months and 14 months to live for a dime thinking my analysis was perfect and carrying cost was low. Stock went up 20x. Lesson learned. Gamma in last 7-10 days destroys. I have an extensive array of WLT long shares, short covered calls, short naked calls and short puts ranging from weeklies to Jan 15 with more money in calls than puts - although to be fair I am net long given some of the calls are synthetic puts with the long shares. I have strikes from $7.50 on puts up to $13 with calls from $13 to low $20s. I keep buying high and selling low as I delta hedge and kill out gamma. Not been a good 2-3 weeks there. I know I am buying highs but the discipline to avoid a massive potential gamma move is causing some modest trading losses. Underlying core has been good but even there I forced myself to take off 80% winners with IRRs still above 2% per week just to book profits and reduce scaling. But I also had to scale back calls to balance. I closed out similar SPWR calls on Monday to miss some of the hedging in Tuesday's shellacking. But I booked $20K in Sept on large volume expiries of nickel and dime priced options. Win some lose some. Jon PS looks like LCC might pop depending on timing of news releSe about settlement possibilities. Arrggghhh!

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