11:45 a.m. New York time

I’ve entered an options play on MU, structured as non-directional short iron condor.

10 a.m. New York time

I shall analyze MU as an earnings play; the company publishes results after the closing bell today.

Here’s the present status of my options positions …

sym	option debit	share price	curr % max profit	net profit/share $
AAPL	3.07	221.31	21.1	0.82
AMD	0.84	31.62	14.3	0.14
EWZ	0.82	32.78	4.7	0.04
GNRC	0.95	57.58	21.5	0.26
SPY	3.55	292.81	(15.6)	(0.48)

… and my shares positions …

sym	share price	net result %	net profit $
AAPL	221.31	-1.2%	(2.65)
CHK	4.42	10.5%	0.42
FXI	42.62	3.4%	1.41
SPXU	32.11	-20.8%	(8.45)
VNQI	57.42	1.1%	0.61

By Tim Bovee, Portland, Oregon, Sept. 20, 2018

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10:40 a.m. New York time

I have no new trades in sight today. The problem child among my holdings is AAPL, which has fallen below the lower break-even point on my short iron condor. The position expires in nine days, so the question is, will it reverse in time to ease the loss?

This AAPL chart covers five days with five-minute bars. The Elliott wave count is looking solely at the form. The level may be Subminuette {-1}, but I’m ignoring it for my purposes today.

The chart shows AAPL is well within the 5th degree, which means that the decline is on its last leg. The whole movement has last only five calendar days and in its third trading day, so a reversal by the end of the week is certainly not improbable. My normal practice would be to exit AAPL on Monday, Sept. 24.

I’m keeping in mind that the present loss per share on the contracts is $1.72, and my maximum risk is $6.10. The chart shows a small reversal up from today’s low of $215.30. A drop below that level will prompt me to close the position immediately.

Here’s the present state of my options holdings:

sym	option debit	share price	curr % max profit	options days left
AAPL	5.62	215.37	(44.5)	9
AMD	0.86	30.56	12.2	16
EWZ	0.86	32.45	0.0	58
GNRC	1.00	58.53	17.4	30
SPY	3.01	290.90	2.0	58

… and my shares holdings:

sym	share price	net result %
AAPL	215.37	-3.8%
CHK	4.24	6.0%
FXI	42.53	3.2%
SPXU	32.71	-19.4%
VNQI	57.29	0.8%

By Tim Bovee, Portland, Oregon, Sept. 19, 2018

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iShares MSCI Brazil Capped ETF (EWZ)

Update 11/8/2018: I’ve exited EWZ at a cost of $81 per contract, giving a profit of $5 per contract. Shares were priced at $39.88 at exit, $7.18 higher than the entry price.

EWZ rose sharply throughout most of my holding period, moving above the profit zone, and then returned to profitability  in the last week before I exited.

Shares rose by $22.0% over 51 days, or a +157% annual rate. The options position produced a 6.2% return for a +44% annual rate.

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I have entered a very wide short iron condor spread on EWZ, using options that trade for the last time 59 days hence, on June 15. The premium is a $0.86 credit and the stock at the time of entry was priced at $32.70.

This is a high implied volatility play relying upon a political event: The general election in Brazil on Oct. 7 amid recovery from a recession and corruption scandals involving some politicians. All in all, it’s an uncertain situation, just the sort of thing to push implied volatility to extremely high levels.

Once the election is over, I anticipate a sharp decline in implied volatility, to the benefit of my position.

The extreme width of the spread reduces the premium. In this case, I’m relying on a steep fall in implied volatility from a high level to provide a bump to the profit. The position will require active management.

The trading idea is not mine but rather came from analysts at TastyTrade.

The profit zone for this position is between $40.86 on the upside and $24.86 on the downside.

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SPDR S&P 500 ETF (SPY)

Update 10/10/2018: I have exited a long vertical bear spread on SPY for a debit of $1.17, or 62% of maximum potential profit, with the share price at $283.20. The profit was $190 per contract.

SPY traded sideways for nine trading days after I ended, and then began a downward march, culminating with a larger drop today that brought my position to profitability. For verticals, my normal exit goal is at least 50% of maximum potential profit.

Shares declined by 2.7% over 22 days, or a -45% annual rate. The options position produced a 162.4% return for a +2,694% annual rate.

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I have entered a short vertical spread on SPY, using options that trade for the last time 59 days hence, on Nov 16. The premium is a $3.07 credit and the stock at the time of entry was priced at $291.11. The breakeven point is $288.93, with all prices at and below that point profitable at expiration.

I made the decision to enter the trade in my account based on Elliott wave analysis suggesting that the 3rd wave down at Minuette degree has begun..

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1:20 p.m. New York time

I have entered a short iron condor position on EWZ. This completes my planned trades for the day.

12:50 p.m. New York time

I have entered a short bearish vertical spread on SPY.

12:10 p.m. New York time

Here’s how my holdings stand as of the middle of the trading day.

Options positions:

sym	option debit	share price	curr % max profit	options days left
AAPL	3.94	219.52	(1.3)	10
AMD	0.95	31.76	3.1	17
GNRC	1.00	58.37	17.4	31

Shares positions:

sym	share price	net result %
AAPL	219.52	-2.0%
CHK	4.14	3.4%
FXI	41.81	1.5%
SPXU	32.63	-19.6%
VNQI	57.24	0.8%

11:45 a.m. New York time

I’ve updated my ORCL analysis with results.  AAPL

11:20 a.m. New York time

I have two new positions in mind for today. First, I think it’s time to re-enter a short bear call spread on SPY. The evidence points to the the 3rd wave down at the Minuette degree having begun.

Here’s a chart of SPY for the last 15 days with 20-minute bars.

Also, I shall be taking a look at a trading idea that is not my own. It a non-directional play on EWZ, which tracks the Brazilian markets. The source of the idea is today’s Dr. Data mailing from TastyTrade.

10:55 a.m. New York time

I have exited my short iron fly options position on ORCL for a profit. Details to come.

By Tim Bovee, Portland, Oregon, Sept. 18, 2018

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Oracle Corp. (ORCL)

Update 9/18/2018: ORCL dropped sharply after earnings were published and then quickly recovered most of the temporary loss. I exited at 36.5% of maximum potential profit. Shares were at $48.65, and the debit on my options was $1.90, producing a profit of $109 per contract.

Shares declined by 1.3% over my one-day holding period, or a -489% annual rate. The options position produced a +57.4% return for a +20,939% annual rate.

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I have entered a short iron fly spread on ORCL, using options that trade for the last time 32 days hence, on Oct. 19. The premium is a $2.99 credit and the stock at the time of entry was priced at $49.31.

I made the decision to enter the trade in my account based on an earnings announcement.

The profit zone for this position is between $51.99 on the upside and $45.99 on the downside.

ORCL publishes earnings on Sept. 19 after the opening bell.

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12:50 p.m. New York time

I have entered a short iron fly options position on ORCL.

11:05 a.m. New York time

ORCL publishes earnings after the closing bell, and I shall analyze it as a potential earnings play. Given the nature of the broader markets, I’m leaning at this point toward a non-directional iron fly strategy.

SPY and the S&P 500 are trading within the prior day’s range

Here’s the present state of my options holdings:

sym	option debit	share price	curr % max profit	options days left
AAPL	4.05	220.00	(4.1)	11
AMD	1.03	31.99	(5.1)	18
GNRC	1.10	57.61	9.1	32

… and my shares holdings:

sym	share price	net result %
AAPL	220.00	-1.8%
CHK	4.04	1.0%
FXI	41.66	1.1%
SPXU	32.99	-18.7%
VNQI	56.85	0.1%

By Tim Bovee, Portland, Oregon, Sept. 17, 2018

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Housing dominates a week largely devoid of other major economic reporting. Housing starts, a leading indicator, will be published Wednesday at 8:30 a.m. New York time, and existing home sales — the larger part of the market — on Thursday at 10 a.m.

A third housing report, generally thought of as being of lesser importance, is the housing market index, produced by the National Association of Home Builders. It will be released on Tuesday at 10 a.m.

My favorite Federal Reserve report, the quarterly Financial Accounts of the United States (Z.1), will be published on Thursday at noon. It has no market impact to speak of, but for a broader view it is nonpareil. The report lists the assets and liabilities of the U.S. economy — private sector and public sector. I find it be more exciting reading than my other big-picture standbys: The monthly Gross Domestic Product report from the U.S. Bureau of Economic Analysis and the Beige Book, published eight times a year by the Federal Reserve.

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Apple Inc. (AAPL)

Chesapeake Energy Corp. (CHK)

iShares China Large-Cap ETF (FXI)

What to do with an orphaned account? In this case, it’s a Roth IRA account that got hit hard by losses last year, leaving only a small amount of cash? Especially if, like me, you’re retired and so can no longer put new funds to fill the tax-deferred account.

It’s too little money to productively trade using options. The only conceivable strategy is one that has long been anathema to me: Buy shares and hold them, praying that Fortuna will smile upon them.

I did that bit of housekeeping this afternoon, establish a small number long-share positions in AAPL, CHK and FXI.

There’s very little strategy behind these choices.

AAPL because, you know, Apple. They’ll eventually produce a roaring success, they’re smart and focused, they have a lot of cash, and they like to do stock buybacks to keep shareholders happy.

That left a few bucks remaining, so I had to fit prices to what I could afford. I chose CHK because its the oil business, which often moves independently of the broad markets (and also as an homage to my father, who got his start in business as a partner/accountant of a drilling contractor firm in Oklahoma), and FXI because China, although a wildcard at this point, seems to have a long-term strategic plan that I suspect will result in a rapid recovery, no matter how much tariff pressure it faces from the U.S.

The AAPL entry price was $223.96 per share, CHK $4.00 and FXI $41.21.

By Tim Bovee, Portland, Oregon, Sept. 14, 2018

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2:35 p.m. New York time

I did a bit of housekeeping to open positions on a zombie account, one that had been depleted by circumstances with no chance of replenishing it. I entered small long-shares positions in AAPL, CHK and FXI.

10 a.m. New York time

SPY and the S&P 500 are trading within the prior day’s range, and my positions are similarly calm as the market day opens.

Here’s the state of my options holdings:

sym	option debit	share price	curr % max profit	options days left
AAPL	2.88	224.92	26.0	14
AMD	0.93	31.28	5.1	21
GNRC	1.30	57.56	(7.4)	35

… and my shares holdings:

sym	share price	net result %
SPXU	32.61	-19.60%
VNQI	56.83	0.04%

I have no trades in sight today, as I wait for the funding of my new brokerage account with TastyWorks to clear.

I shall post my look at economic reporting and other events during the coming week, The Week Ahead, on Saturday.

By Tim Bovee, Portland, Oregon, Sept. 14, 2018

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