I'm not lovin' it - Week in review (Jun 3 - Jun 7)
Well, I f*cked up...again.
Should've been a really great week, but my refusal to take a small loss on McDonald's a couple months ago came back to bite me in the ass.
I got assigned on the short leg of a bull credit spread, so now my account is like -30k in cash. I will probably need to close all my MCD positions next week for total loss of $2-3k (i.e. all my accumulated profits so far).
Sigh.
Also, started experimenting a lot, and overtrading a bit.
Here's my new positions on the week:
Opened #
| Ticker | Action | Type | Date | Expiry | Sell Strike | Buy Strike | Premium | Qty | Fee | Net |
|---|---|---|---|---|---|---|---|---|---|---|
| MCD | assigned | BPS | 2024-06-01 | 2024-06-21 | - | 275 | - | 100 | 0 | -27500 |
| MCD | open | Covered Call | 2024-06-04 | 2024-06-21 | 272.5 | - | 0.55 | 1 | 1.05 | 53.95 |
| SPY | open | BCS | 2024-06-01 | 2024-06-07 | 526 | 527 | 0.54 | 1 | 3.09 | 50.91 |
| VIX | open | Long Call | 2024-06-01 | 2024-10-15 | - | 42.5 | -0.41 | 1 | 1.3 | -42.3 |
| NKE | open | BCS | 2024-06-01 | 2024-07-19 | 100 | 105 | 1.16 | 1 | 1.4 | 114.6 |
| XSP | open | BCS | 2024-06-07 | 2024-06-28 | 536 | 537 | 0.58 | 1 | 1.84 | 56.16 |
| ES | open | BPS | 2024-06-07 | 2024-06-07 | 5300 | 5295 | 0.5 | 0.5 | 2.84 | 22.16 |
| ES | open | BCS | 2024-06-07 | 2024-06-07 | 5400 | 5405 | 1 | 0.5 | 2.84 | 47.16 |
| QQQ | open | BCS | 2024-06-07 | 2024-06-14 | 463 | 464 | 0.56 | 1 | 1.61 | 54.39 |
Assignment at the beginning of the week put me in panic mode. Completely forgot to make my weekly SPY trade, which would have been in the profit already.
Made a few trades based on Option Alpha "trade ideas". Will be experimenting with their trades over the next month.
Randomly decided to trade an iron condor on futures ES (S&P futures). Might consider trading futures more, because they're all cash-settled (i.e. no assignment risk)
VIX long call is a hedge in case the market tanks.
Closed / Expired: #
| Ticker | Action | Type | Date | Expiry | Sell Strike | Buy Strike | Premium | Qty | Fee | Net | Profit/Loss |
|---|---|---|---|---|---|---|---|---|---|---|---|
| PYPL | open | BPS | 2024-05-17 | 2024-07-19 | 60 | 55 | 0.82 | 2 | 1.39 | 162.61 | $1.13 |
| PYPL | close | BPS | 2024-06-05 | 2024-07-19 | 55 | 60 | -0.8 | 2 | 1.48 | -161.48 | |
| AMZN | open | BPS | 2024-05-28 | 2024-07-19 | 170 | 165 | 0.9 | 2 | 2.82 | 177.18 | $5.70 |
| AMZN | close | BPS | 2024-06-05 | 2024-07-19 | 165 | 170 | -0.85 | 2 | 1.48 | -171.48 | |
| SPY | open | BPS | 2024-05-28 | 2024-06-07 | 520 | 509 | 0.66 | 3 | 4.2 | 193.8 | $193.80 |
| SPY | expired | BPS | 2024-06-07 | 2024-06-07 | 509 | 520 | 0 | 3 | 0 | 0 | |
| V | open | BPS | 2024-05-29 | 2024-07-19 | 260 | 255 | 0.89 | 2 | 1.4 | 176.6 | $59.80 |
| V | close | BPS | 2024-06-05 | 2024-07-19 | 255 | 260 | -0.57 | 2 | 2.8 | -116.8 | |
| NKE | open | BCS | 2024-06-01 | 2024-07-19 | 100 | 105 | 1.16 | 1 | 1.4 | 114.6 | $5.20 |
| NKE | close | BCS | 2024-06-05 | 2024-07-19 | 105 | 100 | -1.08 | 1 | 1.4 | -109.4 | |
| SPY | open | BCS | 2024-06-01 | 2024-06-07 | 526 | 527 | 0.54 | 1 | 3.09 | 50.91 | -$44.51 |
| SPY | close | BCS | 2024-06-06 | 2024-06-07 | 527 | 526 | -0.94 | 1 | 1.42 | -95.4199999999999 | |
| ES | open | BPS | 2024-06-07 | 2024-06-07 | 5300 | 5295 | 0.5 | 0.5 | 2.84 | 22.16 | $22.16 |
| ES | expired | BPS | 2024-06-07 | 2024-06-07 | 5295 | 5300 | 0 | 0.5 | 0 | 0 | |
| ES | open | BCS | 2024-06-07 | 2024-06-07 | 5400 | 5405 | 1 | 0.5 | 2.84 | 47.16 | $47.16 |
| ES | expired | BCS | 2024-06-07 | 2024-06-07 | 5405 | 5400 | 0 | 0.5 | 0 | 0 |
- Closed Net Profits/Loss: $290.44
After getting assigned $27,500 position on MCD, my account had zero margin left to do anything.
So, I panicked and closed basically all of my shorter term positions. Fortunately, all the positions were either around break-even or in the profit.
Unfortunately, I would have made a lot more if I just held a couple more days as the market jumped up.
Notes and Lessons #
Profitable week which will soften the blow a tiny bit when I take a huge loss over the next week or two.
Still weighing my options on what to do with my shit MCD positions right now.
If I had just followed the original strategy, I would have let it close for a loss of a few hundred dollars.
Now, thanks to my genius, I'm sitting on a $2k loss.
McDilemma #
Here is the situation:
- Currently have 100 shares of
MCDat average price of around $272.50 per share. - Have 1 long put at $260 (other half of my original short put spread)
- Have another
MCDshort put spread at 270/250 expiring Jun 21, which will lose me over $1000 if I close it now. Tried to roll it, but failed. - Current
MCDshare price is $256, and not looking good. - Options are all expiring in 2 weeks (Jun 21st)
Here are my choices right now:
- Close everything; eat the loss
- Just close all the positions I have for a total loss of $2000 to $3000. Trying to roll/adjust everything just made it worse last time.
- Keep the 100 shares, and close everything else
- I still think McDonald's is a strong company, and it is quite undervalued at the current price level. I could keep the shares and continue selling covered calls on it, hoping that it will go up.
- The problem with this is that I will be paying interest on my negative cash balance until I sell. Also, it will kill my margin.
- Also, the stock could tank farther, then I'm just really fucked.
- Try to roll everything out
- Delay my doom, and try to roll everything out farther and hope that
MCDstock price recovers. I tried to do this last week actually, but couldn't get my orders to fill. - Will probalby need to roll the 270/250 spread for 0 credit, or increase the spread width.
- Rolling out the 260 long put will cost me money, unless I also roll it down to 255-250, which will then increase my risk.
- This strategy fucked me last time.
So what should I do? Not sure. Nothing seems optimal.