-SELL CAT 100 (Weeklys) JUN2 14 106 CALL @.35
This is my 3rd CAT trade in the last few weeks and it’s been working out very well. I’m short CAT meaning that I’m looking for it to stay on the downside. It has been rallying close to 105 and it right now at about $104.10. I’ve been selling 105 calls and buying them back soon after as the stock falls. Every time it has been climbing toward 105 I’ll sell some calls looking for it to turn around. This new trade I’m selling 106 calls which expires in 10 days. EVEN BETTER! because I’ve been holding the 105 options and keeping an eye on it to make sure it doesn’t go above 105 or I could get assigned. Now having my strike at 106 I really shouldn’t have to worry about it getting there. Immediately after the order is filled at $.35 I put in another order (GTC) to buy them back for $.10. So if the price of the stock goes down to about $102.80 then my order will automatically execute for my profit. KICKASS! If it doesn’t reach my buy back order within 10 days then it expires worthless and I make full profit.
5/5/14 – CAT blasting higher riding along JOY’s earnings report. Considering a roll on this trade to July 110 for a small loss. Going to see what the market does. Looking for a sharp sell off at all time extreme market highs. If I do roll I’ll look for $.31 for a potential scratch.
News pushed all markets even higher to crazy levels.
6/5/14 – SELL DIAGONAL CAT 100 JUL 14/JUN2 14 110/106 CALL @-.53 LMT
The market just could not be stopped today. I was hoping it was a pop & drop but man it’s crazy. Rolled the trade to the July 110 and took a pretty heavy loss but there’s nothing I could do considering the risk of assignment. Got to lose to learn. If I was to just close the naked call trade and not roll it then it would be a substantial loss, so my roll move was totally necessary to cap my loss.
I mean the difference in these two charts is scary…
7/7/14 – SELL DIAGONAL CAT 100 AUG2 14/JUL 14 112/110 CALL @.31
This is still a pain in the ass. Extended it a little more for a even swap. I’m now looking at 112 strike. Hoping it will go down a little more and then I’ll be looking to close it or possibly take some off. Could have got a small profit on the recent one but blew it. CAT sucks! ARRR!
7/17/14 – SELL DIAGONAL CAT 100 JAN 15/AUG2 14 120/112 CALL @.54
This is it! Until December.. So earnings were creeping up and I needed to make a move so I look for a long role out. I made a really good credit on this trade and now I’m way out there. The stock would have to get up above 120 by Jan 2015 for me to have to make another move. If it tanks I will probably kill the trade and be done with it. So now the stock has to rise over $10 a share to way above all time highs. I don’t see that happening, but….
7/24/14 – CAT got crushed on earnings! Dropped the stock price by about $5 to a share price of $105ish.
9/19/14 – BOT CAT 100 JAN 15 120 CALL @.27
SUPER STOKED! Had a limit order in to sell this thing and it just surprisingly hit. I didn’t even see it coming.
To sum up the trade I entered at $.35 and ended up with it at $.40. So I actually made about %15 profit! I was thinking that it would eventually expire worthless for a better profit but I’m stoked just to scratch since back when it went so bad. =) But this is a great example of how you can role options to save your ass. My strike was 106 (stay below) and it went to over 111. Went that bad and I still made money. Holy crap!
DISCLAIMER - JVOND SUCKS AT INVESTING! FOR LEARNING PURPOSES ONLY!