Forgotten Profits Trade Setup Archive

The market is getting way overbought, with VIX now below 15. Option prices getting really cheap.

Makes probabilistic sense to take a counter trend bearish position..lose a little versus make a lot.

TRADE IDEA

Buy to open SPY July 210 puts @ 1.75

These expire 7/15/16

The SPY May 207.50 puts expired worthless, so we kept the initial premium that we received.

Let’ s sell another put against our long 6/10/16  SPY 209 put position that we still hold.

TRADE IDEA

Sell to open SPY June 208 puts @ 0.35 to open

These expire 6/3/2016

Make sure to sell the same number of contracts as the June 209 puts  (expire 6/10/16) you presently hold long. 

VIX is below 14, which is getting very complacent. In the past these have been prescient times to take a short position via a long put. Let’s hedge it further by selling some short term options against it to create a spread.

TRADE IDEA

Buy to open SPY June 209 puts (expire 6/10/16)

Sell to open SPY May 207.50 puts (expire 5/27/16) 

1.50 net debit

Apple put spread will expire worthless and we will keep the premium.

Exxon Mobil  spread (XOM) needs to be closed out at the best price possible before the close today since it is is right at the 90 strike.

TRADES THIS WEEK

The portfolio exited the AMZN Put calendar trade at 5.20 for a quick two day gain of 10%. entering at 4.70 and exiting at 5.20. 

OPEN POSITIONS

Portfolio is short two spreads, the AAPL May 90/88 bull put spread and the XOM May 87.50/90 bear call spread.

Will definitely monitor these closely this week as both expire this Friday.

Have several nice trade set ups for Monday as long as the market remains somewhat well behaved. 

AMZN is getting extremely extended at these levels. With premiums very high, looking at positioning in a guardedly bearish fashion with a put calendar trade.

Looking to buy the 700 strike puts that expire next week and sell the 700 puts that expire this week. Idelaly AMZN closes near 700 this Friday.

TRADE IDEA

Buy to open AMZN May  700 puts (expire 5/20/16)

Sell to open AMZN May 700 puts (expire (5/13/2106)

4.70 net debit

SLV has fallen sharply over past several days, let’s use the weakness to grab a quick 30% gain.

CLOSEOUT

Sell to close the all of SLV June 17.50 puts @ 1.30 or better

These expire 6/17/16

Apple is looking comparatively cheap at these levels, so let’s look to position by selling an an out of the money put spread to take a guardedly bullish position.

TRADE IDEA

Buy to open AAPL 5/20/16 88 puts

Sell to open AAPL 5/20/16 90 puts

0.30 net credit

Margin requirement is $170 per spread

Return on risk is 17.67%

Should be filled on selling the CAT May 75 puts @ 1.60 on the GTC order for a 28% net gain, as they traded through our limit to 1.65 yesterday.