My YTD performance and reviewing Options Action and Fast Money from 2/9/2018


In an earlier post, I shared my one-year performance in my two active trading accounts, one is a retirement account and the other is taxable. 

I call my retirement account my speculative account and I call my taxable account my less risky account. 

In the speculative account I trade large volumes of options. Fidelity loves me, even at $4.95/trade. I have about 25 names going. Last year I made about 75% in this account. 

In the less risky account I trade SPY and call and put options on SPY. Last year I made about 35% in this account. 

Here’s my YTD performance for these two accounts after this draw down: 

Speculative – down 7.37 % 

Less Risky – down 19.17% 

Ouch! Funny the difference, right? Is Less Ricky really less risky based on these numbers? 

BUT, remember volatility is WAY, WAY up which means the bid/ask spreads are much higher in options, particularly put options which greatly exaggerates these numbers.  

Also, I have/had a great deal of working calendar spreads in the speculative account which is the PERFECT thing to have on going into a volatility spike. On Friday a bunch of the short legs of the spreads went to 0, most of the credit spreads went to 0 too. I either rolled them up and out, or just held on to the longs over the weekend. 

Which brings me to yesterday’s Fast Money and Options Action. I’m feeling a bit nervous as I agree completely with the ChartMaster’s analysis. I think we have hit the 200-day moving average in the SPY and reversed. I don’t think we get back to all-time highs within two weeks, but maybe in the course of a month? 

As to the other trades mentioned: 

XOM – I have not stock or options in this name, but I agree it may be time to change that. Mike’s trade of the March16 77.5/82.5 call spread for $120 looks good to me. Monday I am going to look into following him into that trade or maybe set up a April/March calendar spread. Will post it here if I do. 

F – no recommendation from Mike, but ChartMaster thinks the chart is similar to XOM above. 

WMT – Dan takes this name on and recommends selling a put spread, the March 97.5/92.5 collecting about $150 each (risking $500). I actually like this too, the exaggerated volatility means you can get more for these credit spreads than before. Calendar put spreads would work here too. I may look into buying one April 97.5 put, buying one March 92.5 put and selling two March 97.5 puts. I think this is called a long calendar put butterfly. 

VXX – Mike talked about this on OA and the other guys on FM too. Suffice it to say most agree it will be difficult for this to hold this level and I couldn’t agree more. I’m not going to bore you with recapping my VXX trades (and UVXY and SVXY) but one week ago these names (all long now) used to be about 7.5% of my speculative account is now about 12% of the account. Probably why the account got hit the least.

Thank goodness for my moron trade!