The market internals are suggesting a market pull back although we are not expecting a significant one until next year because of the traditional bullish time of year.
Adjustments and Comments on Open Trades
FSLR – Shorted 10 Nov $35 puts for $580. Got assigned, so sold 10 Dec 32.5 calls for $1,700, converting the position into a covered call. It closed at $32.61 (11 cents in-the-money); roll today to the Jan 37.5 calls for net credit of $.50+.
FB – Shorted 10 Dec $115/110 put spread for $1,220. Cost to close currently $.34, so move stop to .61 to lock in 50% of max gain if it weakens. Should close well above the short $115 strike at today’s expiry, giving full $1,220 profit.
CF – Shorted 10 Dec 22.5 puts naked for a limit of $.15/share and $.20/share and for an average basis of $.175/share. Move stop break even.
TBT – Purchased 1,000 shares at $40.00/share as core trade. With TLT (bonds) strengthening, TBT (yields, which move inverse to bonds) is falling; thus, we recommend selling the Dec 40 calls for $1450 to lower cost basis to $38.55/share. Although we are long-term bullish on TBT (yields), it has had a big run so we don’t want to roll at this time. Let it get assigned for max gain of $1,450. We will look for a new trade opportunity.
TBT – Shorted 10 Dec $40 puts for $1,400 as income trade. Cost to close currently $.34, so move stop to .70 to lock in 50% of max gain if it weakens. Should close well above the short $40 strike at today’s expiry, giving full $1,400 profit.
TER – Shorted 10 Jan $24/21 puts (i.e., a bull put spread) for $520. Cost to close currently $.15, move stop break even. Acting well, no changes.
UNH – Shorted 10 Dec $145 puts for $1,750 (core trade if assigned). Should close well above the short $145 strike at today’s expiry, giving full $1,750 profit. Still looks higher, we will watch for a new entry.
FXE – Shorted 10 Dec $101.5/98.5 bull put spread for $38o. Despite nice move up, stopped break even.
SPWR – Shorted 10 Dec $7 puts for $320 and 10 Jan $6 puts for $250. Had nice breakout so move stop break even. The Dec $7 puts closed at $.05 x .08, giving huge cushion for maximum gain. Move stop under $7 as expires today and don’t want to get assigned. The Jan $6 puts closed at $19 x .24, move stop break even.
Happy trading! If you have any questions or comments, please e-mail Greg Capra at Greg@mastertrader.com or Dan Gibby at Dan@mastertrader.com
All the best,
Founder of The Pristine Method of Trading