Trades this past week (May 1 - 5) - Impatience + Experiments
There were not many opportunities at the beginning of the week, because of very low volatility in the market.
I got impatient and entered some trades I maybe shouldn't have.
Also entered some very short term contracts (under 1 week to expiry). Might be a strategy I look into more
Opened:
- TSLA
- MDT
- XOP
- SPX
Closed / Expired:
- TSLA
- SPX
Let's take a look in more detail:
Opened Positions #
I opened three Bull Put Spread (BPS), and one Bear Call Spreads (BCS) this week.
1. TSLA (BPS) #
- Opened: 05/02/2023
- Expiry date: 05/05/2023
- IV %: 2%
- Current price: 161
- Sell put @ 150
- Buy put @ 148
- Premium collected: $17 / contract
- Volume: 1
Notes:
One of my short expiry experiments. TSLA always has good liquidity. It's relative implied volatility was super low (2%), but it's still volatile compared to other stocks out there. Slightly oversold, and $150 is a major support level, so I figured it would be safe within the next 4 days at least. Also only traded 1 contract, with maximum risk of $200 (less than 1% of portfolio), so it was not a big deal if I lost it all. Premium collected was very small, but high probability of profit, so it's a trade off.
2. MDT (BCS) #
- Opened: 05/03/2023
- Expiry date: 06/16/2023
- IV%: 39%
- Current Price: 90
- Sell call @ 95
- Buy call @ 100
- Premium collected: $88 / contract
- Volume: 1
Notes:
Another trade I didn't really want to enter, but there was not much else happening. Had a recent spike up, breaking through 200 daily MA, which may signal it's going to be in an uptrend. That would go against my bear position. Very overbought though, and seems to be holding resistance at 92.50. Premium / profit margin is higher, so worth a shot. Took a smaller position than usual, as I don't like this trade that much.
3. XOP (BPS) #
- Opened: 05/03/2023
- Expiry date: 06/16/2023
- IV%: 22%
- Current Price: 118
- Sell @ 107
- Buy @ 102
- Premium collected: $80 / contract
- Volume: 1
Notes:
This is an oil ETF. Oil has been beaten up recently, and this ticker is nearing major support at $115 area. Main reason I didn't like this trade too much is that the IV percentile is a bit low (22%). Good premium/profit margin though around 20%. Also only took small position.
4. SPX (BPS) #
- Opened: 05/04/2023
- Expiry date: 05/08/2023
- IV%: 2%
- Current Price: 4082
- Sell @ 3985
- Buy @ 3980
- Premium collected: $50 / contract
- Volume: 1
Notes:
Another short term expiry experiment. SPX European style option. Oversold at recent support level. Actually took my tiny profits already (below).
Closed / Expired Positions #
Closed 1 short term position, and had 1 position expire; both for minor gains.
1. SPX (BPS) #
- Opened: 05/04/2023
- Closed: 05/25/2023
- Total days: 1
- Premium received: $50 / contract
- Premium paid: $20 / contract
- Volume: 1
- Net: $23
Notes: Closed one day after opening. Short term expiry play worked out in my favor. Maybe it was just luck. Not sure if it's something I'll continue doing in the future or not. Commissions on SPX are higher. Paid over $3 to close out the position. Maybe would've been smarter just to let it run to expiry.
2. TSLA (BPS): Expired #
- Opened: 05/02/2023
- Closed: 05/05/2023
- Total days: 3
- Premium received: $17 / contract
- Premium paid: $0 / contract
- Volume: 1
- Net Profit (after commissions): $15
Notes: This short term expiry trade also worked out. I let it run to expiry, since my position was so small anyways. If I had taken profits early, commissions would've eaten a huge percentage.
Summary Notes and Thoughts #
Very slow week.
Wondering if selling these short term expiry spreads are something I can continue doing or not. When there's low volatility everywhere, might be a good idea. When it's close to expiry, the price won't be affected as much by an increase in volatility. The quick time decay will also be in my favour?
Something to think about anyways.
My other positions have not really done much. DLTR trade from last week spiked up against my bear position, so may be taking a loss soon on that one soon.