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Rolling

Rolling (IRA): IWM May 14th 205 Short Put to June 18th 203... for a 1.89 credit. Notes: With only .30 left in the May 14th* 205 (14 days), rolling this out to June 18th (49 days) 203 (16 delta) for a realized gain and a credit, rather than adding more units (i.e., I'd leave this one open to allow the remaining .30 in extrinsic to piss out and just sell a new contract in June). Total credits collected of 6.32 versus a current value in the June 203 contract of 2.18, so I've realized gains of 6.32 - 2.18 or 4.19 ($419) so far. I would note that "rolling" is the functional equivalent of separately closing and then opening a new contract. It's perfectly fine to do things that way, but doing the "two-step" in a single transaction is just a little cleaner from a tracking standpoint because you will have a single entry/trade for a credit, rather than two trades (one for a debit, one for a credit). * -- The previous post indicated it was a roll to the May 17th expiry, but should have read the May 14th, as there is no May 17th contract.
AMEX:IWM
by NaughtyPines
"OLD SCHOOL" ROLLING/DURATION EXTENSIONI frequently talk about "rolling" options out in time to extend duration, reduce cost basis, improve setup break evens, and increase profit potential, but if my review of recent postings on some options forums is any indication, I've basically taken it for granted that all options trading platforms have this built in as a "one step" process. Well, lo and behold, some still don't. They probably should, since doing something potentially complicated increases the likelihood that you'll fat finger something or make some other calculation error, rolling to a strike or expiry you didn't want or otherwise goof up what was a profitable setup up until that point. So for those of you who have these platforms, you should probably advocate for your broker to make this a potential, headache-reducing change going forward since it takes some of the fiddling around out of the equation. In any event, there are two basic "old school" methods to close out one position and open another farther out in time and receive a credit for doing so, which is what you want in the vast majority of the cases. One is crude; the other, elegant. The crude one is the obvious one. For example, in the pictured setup -- an AMD August 18th 70 covered call, you would do a two step process: (a) close out the 70 short call for a debit; and (b) sell a call at a higher strike for a credit greater than what you closed the 70 out for. Closing out the 70 would cost a 7.65 debit here (at least as of today's close), so you want to look at strikes higher up the ladder that pay greater than that amount so that you kill two birds with one stone: (a) you reduce cost basis further; and (b) you increase your profit potential. Here would be some candidates: the September 72.5 short call, paying 7.80; the October 72.5 short call, paying 9.25; the October 75 short call, paying 7.95; the January 15th 75, paying 11.70. All of these pay a credit in excess of what you paid to close out your in-the-money short call, with no particular expiry being "the right choice"; it all depends on how much you want to stay in the trade, how long you want to stay in it, etc. And now the elegant one: as a single order, buy to close the 70, sell to open a short call out in time that results in credit. As an example, say I wanted to roll out to the October 75 strike, I would "Buy to Close the August 21st 70/Sell to Open the October 16th 75", .28 credit. I reduce my cost basis by .28 ($28), increase my profit potential by 5 strikes ($500) -- all in one step. This is, in essence, what the broker is doing for you by giving you "rolling" functionality in its platform.
NASDAQ:AMDEducation
by NaughtyPines
4
Pandora (P) Rolling Stock ConsolidationI am not licensed or certified by any individual or institution to give financial advice. I am not a professional Stock trader. Pandora (P) is on a roll--literally. The horizontal Support and Resistance lines can be drawn in a couple different places depending on your risk tolerance or trading plan. The larger channel is a roll between $4.50 and $5.40. (green horizontal lines, or top most and bottom most if you can't see the color green very well) Upside: More money due to larger spread/channel. Downside: Not as consistent. It doesn't always hit the upper Resistance Line. Smaller Channel $4.65-$5.20 (orange two lines, or middle pair of lines) Upside: It is more consistent--predictable, reliable, and repeatable as I was taught to look for. Downside: You won't make as much money since it's a smaller spread/channel. However, to quote the man who first taught me how to trade Stocks, "You don't go broke making money." Yes, it's a smaller spread; but it's still a win and profit. I painted a dotted arrow showing what I think it could do over the next few days or weeks. If it stays true to its pattern for the past few weeks and months, it should reach support in less than a week. Of course, that is what it has done in the past and we'll have to wait and see what it will do in the future. If you have a Stock or Index you would like me to look at let me know. I can always use more practice. :) If there is a way I can make these clearer to you (candlestick vs. line chart, background color, line color, more thorough explanation, etc.) let me know and I will see if I am able to accommodate you. I am planning on entering this play if it reaches Support and bounces. Let me know if you do and how it turns out for you.
P
by AROD01
ASCENA Retail, Short Term Roll/Consolidating, ASNAI am not licensed or certified by any individual or institution to give financial advice. I am not a professional Stock Trader. For the short term I believe ASNA is rolling. My prediction for the immediate future is it will continue down to one of my two Support lines (either $1.95ish or $1.85ish). Once Ascena hits one of those lines I believe it will bounce and continue its roll back up to a $2.47ish Resistance. If Ascena hits one of the two Support lines I've drawn and bounces up, and the market tone of the main Indexes ends the current retracemet and reverses back to the ongoing Bull trend, I will consider entering an up play.
AShort
by AROD01
General Motors Short Term Bull, Roll, ConsolidationI am not licensed or certified by any individual or institution to give financial advice. I am not a professional stock trader. I believe General Motors is in a rolling/consolidation pattern, at least for the short term. I have two possible support lines drawn. The bottom support line is drawn off the Gap from September 25, 2017 (it's possible to draw a third support line even lower at the beginning of the Gap from September 22, 2017) and the higher support line is drawn off resistance wicks from September 2017 and near the low of December 14, 2017. My Resistance Line at $45.07 is drawn off a lot more points. Throughout October 2017 you can see it acting as old Support, and then in November 2017 it becomes Resistance from the 20th through the 29th, and most recently it was Resistance on January 16, 2018. The orange drawn lines are possibilities of what I think could happen. GM may drop a few more cents and hit the $40.72 line and bounce up, or it could drop to the lower Support of $40.00ish and bounce up. Of course, it could just drop straight through both; but I think it will get a helping hand in rising when the major Indexes reach their 50 Day Moving Average and bounce up after the current retracement is comlete. If, after Earnings is released in a couple days, General Motors hits either of my drawn support lines and begins to rise I will consider entering a Bullish position (either Stock, or Call Option, and maybe paper trade a Bull Put spread for practice).
NYSE:GMShort
by AROD01
MRO Short Term BearishOn November 07, 2017 MRO had a high wick reach $16.59 before closing down for the day. I believe this to be a good resistance line for now due to that same price range (give or take a few pennies) acting as Resistance in April 2017, March 2017, February 2017, November 2016, September 2016, August 2016, and September 2015; as well as acting as Support briefly in October and November 2015. Even though the past couple of days (November 09-10, 2017) have seen green candlesticks , they have been moving down in price. I purchased a December Put, Strike 17, on 11-09-17 for $1.65 (the spread at the time of purchase was $1.62-$1.65). The Stock price at time of purchase was $15.70. $14.12-$14.16 has been a general line of Support in August 2015, Resistance in December 2015, Support again in September through November 2016, Support in March and May 2017, and then acting as Resistance for a couple weeks in October 2017. Due to that activity I believe it possible for MRO to retrace to that area again; and because of that I have targeted that area as my sell point. I expect it to take no longer than three weeks to reach that area of Support. If you draw lines of Support at $14.12/$14.16 and Resistance at $16.60ish I can see a channel/rolling pattern from August to November 2016 and briefly from March to April 2017. If MRO does hit my estimated Support I will wait a few days to see if once again it rises in price to repeat that pattern and becomes ripe for a "double dip," or the opportunity to enter a Bullish/Call play almost immediately after exiting a Bearish/Put play.
MShort
by AROD01
1
ROLLING: IWM DEC 16TH 116/119/121/124 IRON CONDOR ... ... to JAN 20TH 119/122/125 iron fly for a .01 net credit. With the short put side of the Dec 16th iron condor nearing worthless and rolling intra-expiry to a fly not particularly productive, I'm rolling this out to the Jan expiry, improving the call side a strike and rolling the put side into a fly, "keeping the dream alive." Rolling is never fun, but it's the nature of the beast if you do not want to just take the loss and walk away. This is one that will probably have to be worked a couple of cycles to get to scratch ... . IWM/RUT has just ripped brutally to the upside ... .
AMEX:IWM
by NaughtyPines
ROLLING: IWM DEC 16TH 128/132 SHORT CALL VERT ... ... to the Dec 23rd 130/135 for a .25 credit. I previously rolled to the Dec 16th expiry with the intention of setting up an iron fly there by selling a put side against. Unfortunately, I set up the short put vert (which I sold for .43 cr) in the Dec 23rd expiry, so at that point, I had a weird ass setup -- a Dec 16th 128/131 short call vert with a Dec 23rd 124/128 short put vert. Naturally, I could have just let that "play out," but weird stuff bugs me, so I'm fixing it here ... .
AMEX:IWM
by NaughtyPines
4
ROLLING: IWM DEC 9TH 116.5/119.5/123.5/126.5 IRON CONDOR ... ... to Dec 9th 124/127/127/131 Iron Fly for a .47 ($47)/contract credit. I figured I had to do something here to improve the prospects of this broken iron condor. I first rolled the short call vert side from the 116.5/119.5 short call vert to the 127/131. The only way to get a credit from this intra-expiry roll was to widen the spread by one strike. And then rolled the short put side up to the 124/127, creating an iron fly. In order for this setup to have a "perfect finish," price will have to roll back into the "body" of the setup toward expiry. If it doesn't, I'll roll the short call side out again, improve the strikes if I can, and sell the short put side against for a credit such that the cost of the roll is "net credit." Just can't believe that IWM won't give up some of this post-election up-move ... at some point.
AMEX:IWM
by NaughtyPines
BOUGHT TO COVER GLD AUG 19TH 119/124 SHORT PUT VERTContinuing to work the call side up on this setup one strike at a time ... . With 7 DTE, and the put side of this setup nearing worthless, I thought I would close it out here for near max profit, which I did for a .04 ($4)/contract debit. I then proceeded to roll the Aug 19th 121/126 short call vert out to the Sept 2nd expiration, which I did for a small debit (.08/$8 per contract), after which I proceeded to sell the Sept 23rd 119/122 short put vertical against it for a .26 ($26)/contract credit. Unfortunately, I fat fingered the expiration on the short put side (which should have also been Sept 2nd), but I'll probably just leave it there for now (although it's going to bug me a ton every time I look at it). Important thing is: I'm net credit for the roll ... . Naturally, the setup looks like a fierce hot tranny mess here, but I would point out that I'm not necessarily looking for price to finish below 122 by expiration (although I''d love that): I'm looking for price to break the short call side's break even , which is at 126.19. This will, in all likelihood, allow me to roll the short call side again for another credi, narrowing of the spread, and/or improvement of the short call strike, all good things ... .
AMEX:GLD
by NaughtyPines
BOUGHT TO COVER RUT AUG 12TH 1170/1180 SHORT PUT VERTWith 7 DTE here and with the short put vert side of this post-Brexit troubled setup nearing worthless, I covered the short put side for a .13 debit ($13). I then rolled the short call side up and out from the Aug 12th 1170/1180 to the Aug 19th 1215/1230 for a .26 ($26)/contract credit and sold the Aug 19th 1190/1200 short put vert against for a 1.02 ($102) credit, so that I'm net credit for the roll. That being said, I'll still need price to move back lower for me to get out of this trade at scratch or better. It's one of a trio of index trades (SPX, NDX, and RUT) put on post-Brexit that are giving me a headache in this up move.
TVC:RUT
by NaughtyPines
BOUGHT TO COVER SPX AUG 19TH 2015/2025 SHORT PUT VERTAlthough I still have a little bit of time on this, it's too little time to effectively roll the short put side up of this setup here without pushing it in too tight to the call side for my taste, so I'm closing the put side out for a .10 ($10)/contract debit here and leaving the call side to dangle for a bit. As always, hope springs eternal that price will break my 2155 short call by expiry so that I can exit the call side. I'll otherwise roll it out as I did this week's SPX setup ... .
TVC:SPX
by NaughtyPines
BOUGHT TO COVER SPX AUG 12TH 2100/2115 SHORT PUT VERTWith 4 DTE left in this troubled post-Brexit setup and the short put side nearing worthless, I bought to cover it for a .15 ($15)/contract debit, rolled out the short call side from the Aug 12th 2145/2160 to the Aug 26th 2155/2175 for a .55 ($55)/contract credit, and sold a 83% probability of profit short put vert against in the same expiry for an additional 1.05 ($105)/contract in credit, leaving me net credit on the roll and with an Aug 26th 2120/2130/2155/2175 iron condor. Still looking to exit this for scratch or better, but have to pour through the chain to calculate my scratch point ... .
TVC:SPX
by NaughtyPines
BOUGHT TO COVER GLD AUG 12TH 117/121 SHORT PUT VERTWith the short put wing of this Brexit wracked setup approaching worthless, I closed it today for a .04 ($4)/contract debit. I then rolled the short call side out to the August 19th expiry to the 121/126 for a .50 ($50)/contract credit and (inadvertently) sold an overlapping short put spread against it for a .25 ($25)/contract credit. (This is what happens when you're busy and do stuff on the phone app ... ). Hopefully, price doesn't whip back into the put side, and I can fix the overlap with the next roll ... .
AMEX:GLD
by NaughtyPines
CLOSING: SPX JULY 29 2085/2095 SHORT PUT VERTThis is one of a trio of post-Brexit trades in RUT, NDX, and SPX that I put on post-Brexit and that moved, well, a little more than I'd like ... . Today (with 2 DTE to go), I closed out the put side for a .15 debit, and then rolled the call side from 2115/2125 to the 2145/2160 for a .30 credit and then sold the Aug 12th 2100/2115 for a 1.50 credit (giving me the pictured setup). As with my GLD and RUT trades (and soon, my NDX iron condor if price doesn't peel off substantially from the highs), I'm looking to lather, rinse, repeat with net credit rolls (i.e., credit received exceeds any debit paid for rolling) until I'm able to exit the setup for scratch or better ... . Notes: Some people choose to allow the side approaching worthless to expire that way if there is a "high likelihood" that will occur (there was here with the put side). I generally choose to close it out "just in case" something unexpected occurs ... . It's just not worth the extra $5-$15 you'll make, Weird stuff has been known to happen.
TVC:SPX
by NaughtyPines