Well Puts

I bought to close the September JASO puts I was short. A couple days ago I was nearly ready to close out with a loss, but JASO (JA Solar) managed a stellar comeback. JASO has a pretty good chance of making it up to the $4.80 area but I didn’t feel like holding with only 2 more days until expiration. I wanted to grab a profit while I still had it.

I sold these back on July 23rd at .85 and bought them back at .55. That is a net return of 6.00% for about 7 weeks. *

* This is based on the premium I received from the sale of the options (less commissions) and the capital set aside to pay for their possible assignment.

A week to go before September expiration and I have a lot of puts expiring. I need to plan out what I’m holding through expiration and what I need to make adjustments on. The market has been up for every day for a week now and a pullback seems imminent. However, the market doesn’t care what I think and this could continue. I need a plan either way.

Oil & Gas Equipment & Services

BAS was a lottery pick no doubt about it. I’m short the Sep 7.50 puts and there is a good chance I could be put this stock but after the melt-up this morning I’m not so sure. I’m holding for now.

SII is also moving according to plan. I’m short the Sep 25 strike puts. I see no reason to adjust this position at this point.

Semiconductors

ENER
There is a chance I will be put ENER at 12.50 but I’m fine with that. ENER had a really big move on very high volume back on the 8th. It is currently battling the declining 50 day SMA so I need to be concerned with that. If put the stock I will likely look to immediately sell 13 or 14 strike calls on it.

JASO
The JASO and ENER charts look pretty similar. JASO was more of a gamble as I sold these puts well in the money to begin with (Sep 5 puts). Selling short ITM puts can be a very profitable strategy but you have to be very careful. I did this successfully with JASO back on June 24th and bought them back on August 11th.

There was a lot of volume on that recent push to 4 and I’m hoping this is some consolidation. If it can’t get back above 4.10 before expiration I’m getting out or rolling them to October.

Metals and Minerals

RTI I’m short the Sep 17.50 puts. This is moving nicely. Higher highs and higher lows, no adjustments necessary.

Medical Instruments and Supplies

BEAT was a ridiculous trade and I am little embarrassed to even have it on here. I’m embarrassed because the reasons I entered the trade completely go against my rules. However, it is moving in my favor and it looks to have absorbed the 50 day SMA. High volume on recent rallies might suggest accumulation.

ETF

UNG
I am short some UNG 14 strike calls that should expire well OTM. UNG continues to rip, but I’m still staying away until that 50 day SMA flattens out. I will look to sell Oct 14 calls after expiration.

I didn’t have a lot of options expiring in August. I bought-to-close my JASO puts back on Aug 11th for a nice profit and ZOLT on the 19th at breakeven. I only held DRYS and UNG puts through expiration.

UNG - I choose not to roll my UNG puts into Sep therefore I will be put some UNG at 13 and 14 (2 different accounts). This is the third month I’ve sold UNG puts (June and July expired OTM) so my cost-basis is thankfully much lower than the strike price.

UNG just can’t seem to find a bottom so I need to be very careful acquiring much more. The hourly chart looks terrible. There was a lot of volume on Thursday and that could have been the final shakeout of any weak longs but only time will tell. I will be watching this for a pop next week and possibly sell some Oct 11 or 12 puts.

DRYS - I sold some August 5 strike puts back on 7/9 that exipired OTM. This brings my cost-basis down to $8.73 from a starting point of $14.76. It’s always nice to be able to hold through expiration and collect the entire premium.

All the MA’s are flat so I need to wait and see where the next short-term trend is. If it can break through the 6.25 level it could get going to the upside nicely. If we breakdown and head back towards support at 5.00 I will look to sell more puts again.

I’ve been pretty quiet this week. I just haven’t seen any setups I like. I’m watching the following today.

• CRS, TIE
• ENER, JASO, WFR – I sold some 12.50 Sep ENER puts in my taxable account earlier this week. I may sell some more in my Roth if the 38.2 retr holds.
• ANW, FTO, HAL, MDR, UNG
  USO is fighting the 200 DMA and looks like a total chopfest.
• ZUMZ – BEBE took off. I missed that one.

I’m still holding DRYS. Lots of volume this AM and all the MA’s are getting lined up nicely. Be nice to see this one get on a tear. Also watching TBSI and DSX.