• Ocean Man
    Found myself on the wrong side of a couple trades this week: $SPXU, $LF, $AAPL puts, and $GLD puts. I'll continue to hold the first two, and
    2/14/14
    Reply (58)
    • Ocean Man: the latter two will expire worthless today. That's the game you play with cheap options, some go to zero and some go up more than 100%.
      2/14/14
    • Ocean Man: You just try to have more winners than losers, and I had been on a nice streak before getting into this pair. Fortunately, I had some longs
      2/14/14
    • Ocean Man: that outperformed the market, and a couple of nice day-trades, helping to offset the losses on the names above, but still a down week during
      2/14/14
    • Ocean Man: a rally which is always a bitter pill. I had handily beaten the market in January, so still off to a decent start to the year. I plan to
      2/14/14
    • Ocean Man: write up my thoughts on hedging strategies this weekend, seems to be some confusion out there about how it works. If someone is 51% short
      2/14/14
    • Ocean Man: and 49% long, that person is net short. If the market goes up 5% that person would lose 0.1% on their portfolio (.49x+5 + .51x-5) = 0.999.
      2/14/14
    • Ocean Man: If you're just barely net short, it just means you're willing to take a flat result if the market goes up or down. It doesn't mean you get
      2/14/14
    • Ocean Man: annhilated in a small rally. :)
      2/14/14
    • pablo63: OM ! Only a bad week...that s all ! and the point is that usually have good ones...for me is great to see that your are human !!!
      2/14/14
    • Clayton Rulli: calculating total percent short long is tricky when using options.... do you use a program or anyting for it
      2/14/14
    • RAN.T: are you keeping your pos in uvxy
      2/14/14
    • Steven Couche: Tough week for bears, I hedged some positions and lost upside. This was a "just buy anything and make money" week
      2/14/14
    • David Addison: @Clayton. It depends on the money invested. For short options, you have to decide what's at risk. PM me for details.
      2/14/14
    • Perkins Cove: OM, is your overall strategy dependent on market direction? Or individual stocks/etf's?
      2/14/14
    • Dr. Kris: Glad you're brave enough to post your losers. Most folks don't which doesn't instill trust.
      2/14/14
    • Hope128: OM, thanks for your honesty, My $LF also down a lot, but $XIV, $CBI up more, I also followed you to take quick gain on $SDRL &GLD stranglers
      2/14/14
    • Hope128: I appreciate great trade ideas from you, so please keep posting them. Of course we each have to do our own due diligence.
      2/14/14
    • nclsamy: I'm looking forward to reading your hedging strategies. Thank you!
      2/14/14
    • Ocean Man: PC - my longs are based on individual stock picking. The amount of hedge I hold against them is based on market bullishness / bearishness.
      2/14/14
    • Ocean Man: Clayton - awesome point and question. Here's how I look at it: I calc the most I'd be willing to lose if I was long the stock. I say
      2/14/14
    • Ocean Man: "If I was buying this stock, I'd probably buy no more than 400 shares because I wouldn't want to lose more than $600."
      2/14/14
    • Ocean Man: You may view a safe stock like $PG or $T to have a 5% downside potential, and a biotech to have a 70% downside potential, but you can still
      2/14/14
    • det9: Thanks for info OM. With no near term catalysts ( unless we have one this weekend) bears are getting slaughtered as usual..
      2/14/14
    • Ocean Man: estimate your probable amount at risk if the trade went against you. Then I put that amount into options. So I'd buy three $2 calls, or
      2/14/14
    • det9: I have $SPXU, $TZA, $UVXY, short $NFLX, $CAT, $BBW.. I am net long but they did not perform well this week.. do down too this week..
      2/14/14
    • det9: $LF, $URBN , $CVRR did not work out.. $PM is just recovering.. So overall, missed big run ups this week..
      2/14/14
    • Ocean Man: 60 $0.10 calls. If something is high conviction, maybe you do a bit more.
      2/14/14
    • dnorm1234: Thanks for posting your trades OM ,you're a great follow.
      2/14/14
    • Ocean Man: You'd have to adjust that a bit if you were buying deep in the money calls or strangles and such, but that's sort of my rule of thumb,
      2/14/14
    • Ocean Man: which is needed because relative position sizing is very important - you don't want one option trade to wipe out 10 winning stock trades.
      2/14/14
    • Ocean Man: rant - yes, holding UVXY. Took gains on it twice this week, currently down 5% on this batch. I've seen it go up 20% in a day many times.
      2/14/14
    • RAN.T: thanks for the info OM have a great weekend
      2/14/14
    • dc984: thanks for the info!
      2/14/14
    • David Addison: Shorting AAPL... you'll have better luck trying to take down an elephant with a baseball bat.
      2/14/14
    • Ocean Man: I could see someone saying that about a stock that continually makes new highs like $GOOG, $TSLA or $PCLN, but $AAPL is a ceramic toy
      2/14/14
    • Ocean Man: elephant at best. It's 22% off its high, and has two separate drops of 7% and 10% just in the past six weeks.
      2/14/14
    • muldoon1959: I'm shorting $AAPL with weekly puts again, just not certain when. It dIdn't work out this week, but I buy the thesis. And I'm net long!
      2/15/14
    • muldoon1959: The chart last two weeks is a 45% ski slope, straight up. Will the chart for the next two weeks look like that? No it won't.
      2/15/14
    • listolyman: The wild card with options is that the stock could move little or be stagnant but your options could still move up or down 10-100%.
      2/16/14
    • Perkins Cove: Someday...OM is going to break down the percent gains he makes over one year in the 4 basic strategies (day, swing, hold, options).
      2/16/14
    • Perkins Cove: And he will share that info with us?.....grin
      2/16/14
    • Ocean Man: My ballpark guess would be 5, 40, 15, 40.
      2/16/14
    • det9: Like it.. No losses :)
      2/16/14
    • Perkins Cove: Many thanks OM. I figured swing would be up there but wondered about the options. Cheers.
      2/17/14
    • det9: Soros doubles up bearish bet on $SPY
      2/17/14
    • mattbird: det, is that old news though? it was 4q13 when he did that.
      2/18/14
    • det9: Yep.. Few weeks ago but just made headlines I believe
      2/18/14
    • mattbird: right- but correct me if I am wrong, he could have exited that position by now?
      2/18/14
    • det9: Yep.. We would not know..
      2/18/14
    • mattbird: OM, still holding $SPXU and $UVXY here?
      2/25/14
    • det9: Was just about to ask the same...
      2/25/14
    • mattbird: lol, great minds and all that. FWIW, I just started into $UVXY.
      2/25/14
    • mattbird: (and took gains on a lot of stuff)
      2/25/14
    • Ocean Man: Yep. And Baseball Bats 1, Elephants 0.
      2/25/14
    • det9: I am in nice red in $SPXU, $TZA slightly up on $UVXY..
      2/25/14
    • Clayton Rulli: OM I think of it similarly. I dont risk in options more than Id like to lose, cause sometimes options trades do not turn out well ! :-)
      2/25/14
    • dc984: Me too. I'm thinking of cutting losses if the sp makes all time highs, but that would meaning selling low...I dont know!
      2/25/14
    • dc984: Btw one of the CFD trading platforms im using PAYS YOU to short certain stocks or indices. About 3.5% yield!
      2/25/14
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