Dec 262014

– SOLD STRANGLE GILD 100 JAN 15 110/85 CALL/PUT @1.00
My trader buddy and I put this one on today.  It’s looking good.  As the stock rises the volatility will collapse as you can see with the lower chart study.  Also the pricing was so good that we were able to do this one with the Jan’s.  We are kinda on the edge of having to go to the Feb’s. It’s nice to get the Jan’s cause then if we have to roll we’ll have better options.

12/29/14 – SOLD DIAGONAL GILD 100 FEB 15/JAN 15 120/110 CALL @.24
This trade gave me a $.24 credit and extended my time and I was able to move my strike up above it’s all time high. The leg was only a $.12 loser when I made this trade so I don’t have to worry about my account statement. As long as it says that I’m positive I make money and can pull it off at anytime.
A problem I ran into with rolling is not noticing the loss in my account statement. It will drive you nuts because your new contact will reflect a clean slate, or the new value which would be right around a profit= %0.0 +/-.  So my new way of doing it is to just pay for the loss in either “time value” or “strike movement” and then the account statement will look more accurate. I love doing it this way. When it’s in the green, it’s in the green and no trying to re-calculate on the side and leaving notes.
Just following the roll order I put in a limit order with a GTC (Good Till Cancel) to close it at around %40 profit on that leg. The other leg is already over %40 ITM (In The Money) and I have a separate limit order in on that to close at around %60. Both my trade buddy and I think the call could possibly get tested on the up side but what are the chances it will get up to 120..?   According to TOS (Think Or Swim) it’s %7.  Stoked!  That means that this 120 CALL will have a %93 chance of being a winner at expiration, and I don’t ever wait that long to close out.  Any pull back should get us out of the leg for a small profit or at least a scratch, but the trade will most likely be a good winner when considering we are only playing for volatility collapse.

I changed my charts a bit. I like how the RSI and Williams Percent R are giving me good directional indications on the lower studies. The Implied Volatility study is overlaying the volume.

12/30/14 – BOT GILD 100 FEB 15 120 CALL @.45
12/30/14 – BOT GILD 100 JAN 15 85 PUT @.42
Well that was fun!  All done.  =)
My call leg I rolled yesterday hit it’s limit order which left my other leg naked and in risk of losing value on the way down with vol expansion. We were playing for the vol contraction and we got it, I’m out! I’m very happy with the trade especially considering it was just 3 trading days worth. %29 profit after commissions.