Options Trader: Weekly Wrapup

by: Philip Davis

Another week, another record — Ho hum!

While we did set out with the intention of paring down our positions, we ended this option period with more open positions than we started with as it was just an incredible week full of interesting trading opportunities.

We are, however, far more hedged than we were entering the week and I will feel downright silly if we don’t get some kind of pullback ahead of the holiday weekend as covered calls account for many of the 97 open positions in our Short-Term Portfolio, which has a ridiculous average gain of 220% (due to hedges dropping our basis and some real runaways), but a loss of capital of 1.7% on just 22 average days open as we have pulled most of the winners off the table but still have our large protective puts (obviously not winners!) in place.

Our Long-Term Portfolio was spectacular this week with the gain on capital climbing to 77% on 72 average days open for 47 open positions and we are slowly but surely rebalancing our portfolios to bring the STP’s percentage down. It’s left us with plenty of cash to deploy, whichever way the market goes.

In this busy week, we closed 63 positions with an average gain of 133%, slightly less than our gain on capital of 140%, but as I said, we were closing out mainly winners this week so it was hard to miss. Our average hold was just 14 days, which either indicates I was on a heck of a roll or this was a real "monkey with a dartboard" kind of market (hard to miss).

Price Symbol Strike Type Date Qty
Price Paid
Price Sold Date Sold Prof/Loss Profit %
AAPL J $ 105 C 5/10 10 $ 6.25 $ 6.25 5/15 $ - 0%
AAPL J $ 95 C 4/23 20 $9.15 $ 15.50 5/15 $ 6.35 69%
AMGN J $ 58 P 5/10 50 $1.05 $ 4.80 5/15 $ 3.75 357%
CAT M $ 75 C 5/10 -20 $0.50 $ 1.00 5/14 $ 0.50 100%
CSCO M $ 25 P 4/30 15 $ 0.05 $ 0.05 5/15 $ - 0%
DIA M $ 132 C 5/10 -40 $1.30 $ 1.70 5/14 $ 0.40 31%
DIA J $ 134 C 5/10 40 $2.30 $ 3.52 5/15 1.22 53%
DNDN J $ 5 C 5/9 75 $0.20 $ 1.20 5/15 $ 1.00 500%
GOOG M $ 480 P 5/4 -30 $12.00 $ 14.60 5/14 $ 2.60 22%
GOOG M $ 470 P 5/10 -30 $9.00 $ 6.50 5/14 $ (2.50) 28%
GOOG M $ 460 P 5/14 -30 $4.00 $ 3.00 5/15 $ (1.00) 25%
JBX M $ 75 C 5/14 -20 $2.50 $ 1.50 5/15 $ (1.00) 40%
MEE M $ 30 P 5/14 -20 $3.20 $ 2.30 5/14 $ (0.90) 28%
MSFT J $ 33 C 5/4 50 $0.35 $ 0.47 5/15 $ 0.12 34%
ONXX J $ 35 C 5/11 40 $0.75 $ 1.65 5/15 $ 0.90 120%
QQQQ M $ 46 C 5/14 200 $0.55 $ 0.80 5/14 $ 0.25 45%
SLB J $ 75 C 5/11 25 $2.00 $ 3.50 5/15 $ 1.50 75%
T J $ 40 C 4/25 45 $0.63 $ 1.25 5/15 $ 0.62 98%
TXN J $ 38 C 4/25 50 $0.36 $ 0.95 5/15 $ 0.59 164%
YHOO O $ 35 C 5/4 300 $1.00 $ 0.80 5/15 $ (0.20) -20%
AAPL J $ 100 C 4/19 5 $8.20 $ 17.60 5/16 $ 9.40 115%
ABX J $ 30 C 5/1 10 $1.75 $ 2.85 5/16 $ 1.10 63%
AMZN O $ 65 C 4/27 25 $2.00 $ 5.60 5/16 $ 3.60 180%
CHK J $ 33 P 4/30 40 $0.27 $ 0.45 5/16 $ 0.18 67%
CVX M $ 80 P 5/14 20 $ 0.65 $ 0.60 5/16 $ (0.05) -8%
GOOG M $ 480 C 5/11 30 $0.70 $ 0.75 5/16 $ 0.05 7%
IBN D $ 45 C 5/1 10 $3.20 $ 7.00 5/16 $ 3.80 119%
IBN J $ 45 C 5/14 -20 $1.50 $ 2.25 5/16 $ 0.75 50%
PG O $ 65 C 5/10 20 $1.30 $ 2.05 5/16 $ 0.75 58%
SU J $ 80 P 5/7 30 $1.50 $ 1.40 5/16 $ (0.10) -7%
T J $ 40 C 4/25 25 $0.05 $ 1.70 5/16 $ 1.65 3300%
TSO J $ 115 P 5/3 60 $ 6.50 $ 6.75 5/16 $ 0.25 4%
TSO A $ 110 P 5/2 20 $ 4.90 $ 7.70 5/16 $ 2.80 57%
VLO J $ 73 P 5/11 25 $1.90 $ 3.25 5/16 $ 1.35 71%
XOM M $ 80 P 5/16 200 $ 0.23 $ 0.40 5/16 $ 0.17 74%
YRCW J $ 45 C 5/2 20 $0.60 $ 0.30 5/17 $ (0.30) -50%
ADBE M $ 43 C 5/17 100 $0.15 $ 0.90 5/18 $ 0.75 500%
AVP M $ 40 C 4/27 -10 $1.15 $ - 5/18 $ (1.15) 100%
BIDU M $ 130 C 5/16 -5 $1.35 $ 0.90 5/18 $ (0.45) 33%
CCJ M $ 50 C 5/17 -40 $0.50 $ 0.05 5/18 $ (0.45) 90%
DNA M $ 80 C 5/10 -20 $0.85 $ - 5/18 $ (0.85) 100%
GENZ M $ 65 C 5/1 -20 $1.90 $ - 5/18 $ (1.90) 100%
LOW M $ 33 C 5/14 60 $0.05 $ 0.20 5/18 $ 0.15 300%
MEE J $ 25 P 5/14 20 $0.30 $ 0.90 5/18 $ 0.60 200%
MRVL A $ 18 C 2/7 160 $1.50 $ 1.35 5/18 $ (0.15) -10%
OSK M $ 60 C 5/11 -30 $1.40 $ 0.05 5/18 $ (1.35) 96%
POT M $ 210 P 5/17 10 $4.70 $ 7.25 5/18 $ 2.55 54%
QCOM M $ 45 C 5/16 -10 $0.55 $ 0.10 5/18 $ (0.45) 82%
SEPR M $ 45 P 5/18 50 $0.45 $ 1.00 5/18 $ 0.55 122%
SIRI M $ 3 C 4/26 -100 $0.20 $ - 5/18 $ (0.20) 100%
TSL M $ 55 C 5/17 -20 $1.60 $ - 5/18 $ (1.60) 100%
TSO M $ 120 P 5/18 20 $ 1.00 $ 1.50 5/18 $ 0.50 50%
USO M $ 50 C 5/17 20 $0.15 $ 0.35 5/18 $ 0.20 133%
WYNN M $ 95 C 5/11 -50 $2.80 $ - 5/18 $ (2.80) 100%
XOM M $ 75 P 4/20 300 $0.05 $ - 5/18 $ (0.05) -100%
UNH M $ 50 C 5/10 -10 $3.35 $ 3.00 5/15 $ (0.35) 10%
SWN S $ 45 C 4/30 -16 $3.35 $ 3.20 5/16 $ (0.15) 4%
SWN J $ 45 C 5/17 -20 $1.50 $ 1.80 5/17 $ 0.30 20%
FXI M $ 114 C 5/11 -30 $2.50 $ 1.00 5/18 $ (1.50) 60%
GDX M $ 40 C 5/10 -5 $0.65 $ - 5/18 $ (0.65) 100%
PGR M $ 20 C 4/20 -30 $2.90 $ 3.05 5/18 $ 0.15 5%
SWN J $ 50 C 4/30 10 $2.10 $ 4.60 5/18 $ 2.50 119%
USG M $ 50 C 4/18 -10 $1.20 $ - 5/18 $ (1.20) 100%
XOM M $ 80 C 5/18 300 $2.20 $ 3.20 5/18 $ 1.00 45%
Click to enlarge

We also have to say goodbye to our 2-month old $10,000 Portfolio as we close it out with a total value of $20,095, a pretty good recovery after a pretty shakey start. 47 positions were held an average of 30 days as this was not a day-trading portfolio but something that was meant to be relatively easy to follow for smaller investors.

Rather than let that portfolio get unwieldy (as we leave cash and closed positions in so we can track our progress) we’ve decided to hit the reset button with a fresh $10,000 next week but I think a quick review is order:

Symbol Strike Type Date Qty Price Paid Price Sold Date Sold Prof/Loss Profit %
BIDU J $ 105 C 3/22 3 $7.00 $ 26.25 4/27 $ 19.25 275%
BIDU M $ 105 C 3/22 -2 $6.60 $ 22.00 4/27 $ 15.40 233%
BIDU J $ 100 C 4/10 3 $6.25 $ 13.50 4/25 $ 7.25 116%
BIDU A $ 100 C 4/11 -3 $2.00 $ 0.05 4/20 $ (1.95) 98%
BIDU A $ 100 C 4/11 -3 $2.50 $ 0.05 4/20 $ (2.45) 98%
BSX M $ 15 C 3/26 20 $0.60 $ 0.85 4/11 $ 0.25 42%
BSX A $ 15 C 4/9 -20 $0.30 $ 0.45 4/11 $ 0.15 50%
DNDN S 4/6 2 $11.20 $ 6.07 $(5.13) 46%
DNDN M $ 15 C 4/6 -1 $5.50 $ 0.10 5/9 $ (5.40) 98%
DNDN S 4/16 2 $10.85 $ 6.07 $ (4.78) 44%
DNDN M $ 15 C 4/16 -1 $5.30 $ 0.10 5/9 $ (5.20) 98%
DNDN J $ 8 C 5/18 -4 $0.35 $ 0.28 $ (0.07) 20%
DNDN M $ 3 C 5/8 20 $14.65 $ 3.80 5/18 $ (10.85) -74%
DNDN M $ 13 C 5/8 -20 $8.10 $ 0.10 5/9 $ (8.00) 99%
DNDN M $ 10 P 5/8 20 $2.25 $ 4.75 5/10 $ 2.50 111%
DNDN M $ 8 P 5/8 20 $1.00 $ 2.25 5/10 $ 1.25 125%
DNDN J $ 8 C 5/17 7 $0.35 $ 0.50 5/17 $ 0.15 43%
EBAY M $ 35 C 4/18 10 $1.00 $ 0.85 5/4 $ (0.15) -15%
EBAY J $ 33 C 4/24 15 $2.00 $ 0.20 5/18 $ (1.80) -90%
EBAY M $ 33 C 4/24 -12 $1.75 $ 0.50 5/16 $ (1.25) 71%
FDX J $ 110 C 5/1 10 $1.65 $ 2.95 $ 1.30 79%
FDX M $ 105 C 5/1 -8 $2.70 $ 1.50 5/18 $ (1.20) 44%
GENZ M $ 65 C 5/1 -10 $1.90 $ - 5/18 $ (1.90) 100%
GENZ J $ 68 C 5/1 10 $1.35 $ 0.20 $ (1.15) -85%
GOOG A $ 470 C 4/19 -5 $12.00 $ 13.00 4/20 $ 1.00 8%
GOOG M $ 480 C 4/19 5 $14.00 $ 2.25 5/9 $ (11.75) -84%
GOOG M $ 490 C 4/20 -5 $13.50 $ 0.60 5/9 $ (12.90) 96%
HLYS A $ 45 C 5/7 5 $1.90 $ 0.20 $ (1.70) -89%
HLYS M $ 40 C 5/7 -5 $2.00 $ - $ (2.00) 100%
IBM A $ 95 C 4/17 20 $0.75 $ 0.50 4/17 $ (0.25) -33%
IBM A $ 90 C 4/18 10 $0.75 $ 0.60 4/18 $ (0.15) -20%
ICE J $ 140 C 4/17 3 $6.00 $ 6.10 $ 0.10 2%
ICE M $ 140 C 5/11 -3 $3.30 $ - 5/18 $ (3.30) 100%
ICE A $ 130 C 4/17 -3 $3.00 $ 0.75 4/19 $ (2.25) 75%
ICE M $ 135 C 4/20 -3 $6.40 $ 1.50 5/1 $ (4.90) 77%
ICE M $ 130 C 5/1 -3 $3.00 $ 4.00 5/3 $ 1.00 33%
INTC M $ 20 C 4/4 10 $0.44 $ 1.25 4/17 $ 0.81 184%
JDSU J $ 18 C 5/2 20 $0.55 $ 0.05 $ (0.50) 91%
JDSU M $ 17 C 5/2 -10 $0.80 $ - 5/18 $ (0.80) 100%
MRK M $ 43 P 3/30 15 0.65 $ - 4/20 $ (0.65) -100%
NYX J $ 100 C 4/9 3 $5.50 $ 2.00 4/23 $ (3.50) -64%
NYX M $ 100 C 4/9 -3 $3.33 $ 0.95 4/23 $ (2.38) 71%
OXPS J $ 30 C 4/9 5 $1.30 $ 0.77 $ (0.53) 41%
OXPS M $ 25 C 4/19 -5 $0.95 $ - 5/18 $ (0.95) 100%
TASR J $ 10 C 5/7 10 $1.35 $ 1.02 $ (0.33) 24%
TSO M $ 105 P 4/2 4 $3.80 $ 2.50 4/23 $ (1.30) -34%
TSO A $ 110 P 4/17 -2 $2.60 $ 1.50 4/20 $ (1.10) 42%
VLO A $ 63 P 4/3 40 $0.50 $ - 4/20 $ (0.50) -100%
Click to enlarge

Notice not all positions are closed; we will be moving open items to other portfolios so we can start with a clean slate next week. We got taken to the cleaners on the Dendreon Corp. (NASDAQ:DNDN) debacle but, on the other hand, we lucked out with Baidu.com, Inc. (NASDAQ:BIDU) but the real lesson I’ve learned is we will be staying away from unhedged oil plays as they caused more damage than we had time to recover from.

My current plan is to wait until Wednesday to initiate trades. But we may have to wait until after the holiday weekend as a toppy market is no time to make a lot of new bets. If the market insists on continuing straight up, we may be forced to pull some money off the sidelines, as will many fund managers, but the Dow is at my primary target (good prediction) without ever pulling back to 11,500 (bad prediction) and that makes me very nervous.

Ah well, go with the flow has been a great game plan all month, no reason to change it here!