WAG the dog

The WAG trade has been just impossible. It has tested my desire to stay invested in the markets.

This taught me two things:

1. When IV is sustained at 95+ percentile. Something is up. 

2. When shit happens, You, i.e a retail investor, will be the last to know. 

Lergislative action forced WAG to abandon its invertion plans. But the big players knew this well before the newsfeed caught it. Information disparity. Timing matters to the few seconds.

http://blogs.marketwatch.com/capitolreport/2014/08/05/white-house-keeps-door-open-to-executive-action-against-inversions/?mod=MW_home_latest_news

The story took a turn for the worse the next day. It has wiped out all my gains from my trading this year. And then some to put it mildly. The stock has tumbled 21%, now I feel I should have gotten out at zero profit yesterday when I had a chance. This is a good lesson at minding the downside.  Expensive lesson. I should get assigned by the end of the day. So lets see how that works out.

Argentina Defaults on the last day of July

One of the worst days possible. I knew yesterday night after seeing the news of the default that the markets would be hit hard. Got rid of TWTR bear puts since I saw a bunch of upgrades, the contraction I was expecting may not happen. 

FB and WAG positions taking a massive beating. 

The VXX bet is up.  TSLA and GPRO have earnings after hours and hopefully one will pay off. Both are defined risk and limited upside. 

WAG continues to be the biggest concern. It is now within a dollar of my strike. So I am likely to get assigned. I will take the stock, since I want to learn the process of assignment. I have lightened up my position somewhat  by getting rid of the naked short put at a small loss.

Hope for a recovery tomorrow/ Monday. Hope for positive earnings from GPRO/TSLA. Hope not to get assigned on WAG.

The principle I am trying out here is that this somewhat of a buying opportunity and things will recover over the next few weeks or sooner.

Jul 23 - 2014

As a pleasant surprise, the CAVM calls shot up and I got rid of it. I got rid of my FB short put before earnings call. FB shot up 5% after hours. Plan to sell some more short put tomorrow morning. 

Since my last blog, I have loaded up some more on WAG bull put spread. Its now my largest position. The naked short put I have on WAG is making me nervous. I also sold some GLNG short put and SCTY short put. I hope to close soon. 7-10 days horizon, unless it turns against me. 

Redeemed by AAPL/SPY

One of the prime reasons I had joined my present employer, was the hope that depressed stock at that time would appreciate in time. At little more than a year, I feel redeemed. I remember that I left my previous employer and had to forfeit some stock. In the time that I have been employed, the company's stock has outperformed the SPY by a factor of 2x. This cannot last, but I have my fingers crossed. 

July 17th Market

Last Couple of days I opened the following trades.

1. WAG Put 67.5 sold on high IV. WAG slid from 72 to 70. So I am now worried. 

2. FB Put 60 sold. 

3. CAVM Long stock. Got hammered by today's 4% slide. Bought Calls to increase exposure. This is a very risky thing to do. I am exposed further. No hedging at all. 

Today the VIX shot up 40%. And I regret not buying some last week. The malaysian airline shot down over Ukraine fueled the sell off. VIX has been at historic lows and refused to budge to any news. This will play out one of two ways. 

1. This will begin escalation of the conflicts in Ukraine. and the markets will go into a correction. It is clear to me that my tech heavy portfolio will get hit very hard.

2. Tomorrow or next week, will be business as usual and my positions would recover. 

+ 1 day
---------
In usual style, the market shrugged off the jitters, essentially reversing yesterday.  Now going into next week, I hope to get rid of CAVM calls for a ~15%, while keeping the long stock.

Watching closely the WAG & FB short puts.

For now, the strategy is to make 1-2% on capital with a ~ 2 week time horizon. Trade small - trade often . 

Wading into Volatility

Today I made one more tiny step towards my financial education. Over the past year, I have had some pretty interesting shift of some long held beliefs. I have shifted away from the idea of value and now increasingly believe in the short term, momentum and sentiment matter a lot. I made an initial foray into options trading in which I had mixed results. I entered a market that was turning around from a very robust bull run. All my bets were bullish, and I ended up being net negative on my trades.

PETM put sold 30 days out.
After taking a small break, I entered my first volatility trade. PETM had gap'd this morning and had a high IV percentile. I sold a 65 put a month out. Now the stock has been in a uptrend for a month. The hope is that the stock holds its value for a couple of weeks and the decaying IV gives me some credit.
The bad situation would be that the stock fills the gap and corrects after gap'ing.


TSLA 240 Sep call bought.
TSLA is volatile and has been on a pullback over the last week. The hope is it climbs up to 240 in the next two months. I want to hold it for a few weeks, with a max loss of 200 dollars.

--
+ 2 day update.
The TSLA trade has gone pretty wrong. And is down 20% as $TSLA continues to slide.
PETM trade still holds.
NASDAQ and SPY are in slide, so the rest of my portfolio is not doing so well.
I want to wait it out and not pull the trigger.

+4 day update
I added a CAVM call on a sliding underlying. The next day, I was up 50% so sold that.
TSLA went from -300 dollars to +150. So sold that
PETM was closed at 60 USD gain.  So the first volatility play was a success.