TIB: Today I Bought (and Sold) - An Investors Journal #489 - US Media, Network Equipment, US Packaged Goods, US Healthcare, US Technology, Cybersecurity, South Korea, Semiconductors, and more

Options expiry time and a raft of stocks are assigned. With markets rising strongly in the past few weeks, it feels right to be raising cash to wait for any pull backs. Letting the market decide exit points works for me too

Portfolio News

Market Rally

Markets continue to push higher worldwide other than Hong Kong. Investors are basically looking for and believing in a positive outcome on US-China trade deal

The Treasury yields headlines says it all. Rising or making the biggest weekly drop in one and a half months - chose what you want.

Yields continue to hold higher than the pundits predicted is maybe a way to look at it.

The headlines also reminds of the one exception to the happy mood = agricultural commodity markets which have become very volatile and a good barometer for what is really going in the trade discussions. See soybeans chart below

Bought

Scorpio Tankers (STNG): Oil Shipping, Received additional shares (2 plus a fractional share which was sold) in spin-off from Scorpio Bulkers (SALT) of some of its holding in STNG. I was holding STNG stock anyway - so the small parcel of stock received is not a problem.

Soybean Futures (SOYB): Soybeans. Pending order from last weekend hit - I had been trailing the entry point lower on the 4 hour chart. Price is being pushed around by on-off nature of US-China trade discussions.

Sold

The Walt Disney Company (DIS): US Media. Disney + streaming service launched with a few technical glitches. That was not enough to stop price jumping 7.3% to $148.72 which took it past the top of the call spread risk reversal I am holding (145). I closed the call spread leg (January 2020 135/145) for 76% profit since May 2019. The sold put (120) leg remains open - I might well push to exercise that once I have sufficient funds in the account. Taking the net premium if I was to buy back the sold put today, trade profit is 245%. The updated chart shows price has twice passed through the sold call level.

See TIB412 for the initial rationale - it seems I did better taking a longer time frame than the trade idea initially put forward by CNBC Options Action team

The Kraft Heinz Company (KHC): US Packaged Goods. Assigned early on strike 31 covered call. Company due to pay a dividend and the buyer of the call wanted to grab the dividend. Disappointing as price dropped below the sold strike. Locks in blended loss of 4% since February and September 2019. Income trades and dividends returned 3.8% - initial trade idea was an over reaction to stock news in February. The market did not grab back all of that first dip.

United Health Group (UNH): US Healthcare. Profit taking sale on partial holding following Jim Cramer idea for 6.8% profit since July 2019. This sale was of the first lot bought - have averaged down entry price quite a bit since.

Advanced Micro Devices, Inc (AMD): US Semiconductors. Assigned on covered call with 6.7% profit since August 2019. Covered call income added 11.6%.

CVS Health Corporation (CVS): US Healthcare. Assigned on covered call with 10% loss since November 2018. I wrote this call this week = bad call and a bad write as I thought the position was profitable - should have had more coverage. In another portfolio, stock assigned for 21% profit since May 2019 (income 2.4%)

iShares South Korea Index (EWY): South Korea Index. Assigned on covered call with 5.5% loss since August 2018 (income 0.42% in one month).

Kohls Corporation (KSS): US Retail. Assigned on covered call with 6.5% blended profit since November/December 2018 and June 2019. Jim Cramer has been trimming profits - I had to wait for the covered call expiry. Covered call income added 6.4%. In another portfolio, 2.4% blended profit since April/June September 2019. Averaging down did help recover the loss on the first trade of 3 (income 4.7%) . In a third portfolio, 1.4% blended profit since April/June 2019 (income 4.8%).

Technology Select Sector SPDR ETF (XLK): US Technology. Assigned on covered call with 98% profit since March 2016. Covered call income added 5.9%.

BNP Paribas (BNP.PA): Europe Bank. Assigned on covered call with 15% blended loss since February/June 2018. Covered call income clawed back 2.2%.

Randstad NV (RAND.AS): Europe HR Services. Assigned on covered call with 1.2% profit since April 2019. Covered call income added 1.7%.

FireEye (FEYE): Cybersecurity. Assigned on covered call with 21% profit since September 2019. Covered call income added 6.4%. I did buy back in one portfolio.

ETFMG Prime Cyber Security ETF (HACK): Cybersecurity. Assigned on covered call with 5% profit since August 2019. Covered call income added 0.5%.

I am likely to add back cybersecurity holdings. I like FireEye as it has a more liquid options market and the market does not really grasp the extent of its services business.

Archer-Daniels-Midland Company (ADM): Grain Merchant. Assigned on covered call with 5% profit since September 2019. Covered call income added 0.9%.

Marvell Technology Group Ltd (MRVL): US Semiconductors. Assigned on covered call with 6% profit since August 2019. Covered call income added 1.6%. I did buy back in some portfolios.

Shorts

Direxion Daily MSCI Real Estate Bear 3X ETF (DRV): US Real Estate. Rounded up holding to next 100 shares to be able to write covered calls. I did buy back a covered call (27) - price did close below $27 anyway.

iShares 7-10 Years Treasury (IEF): Been waiting for interest rates to tick a little higher after the rally so I could close out some short positions. Today was the day. Closed partial short position for 12% loss since September 2013. This trade comes down to a bad trade management choice to not take losses when it was clear the trade idea had changed direction. It had been a lot worse than this exit point. Worst part is I have been paying dividends away for 6 years too.

Expiring Options

Two interest rate related trades expired. With yields rising over the last 6 weeks, these shorts were heading in the wrong direction

iShares iBoxx $ High Yield Corporate Bond ETF (HYG): High Yield Debt. 86/80 bear put spread expired with price holding above $86 for the last month. The updated chart shows price banging away at a resistance level and just not wanting to break lower = trade ran out of time.

Now the trade logic is probably fine as pressure builds on earnings, record high debt levels and the recent rise in rates. The challenge is picking the timelines for options trades - one trade open is showing on the chart (January 2020 88/84 bear put spread)

iShares U.S. Real Estate ETF (IYR): US Real Estate. Price closed at $92.69 above the strike for the 91 strike puts I bought back earlier in the week = no need to kick myself for saving capital. The 88 sold puts expired well out-the-money

Following hedging trades expired out-the-money

Yamana Gold Inc. (AUY): With price closing at $3.64, strike 4 call options expired out-the-money.

Invesco QQQ Trust (QQQ): With price closing at $202.91, 181/172 ratio put spread expired out-the-money. This trade did carry a small net premium.

SPDR S&P 500 ETF (SPY). With price closing at $311.79, 283/270 ratio put spread expired out-the-money. This trade was cash neutral.

Income Trades

Cisco Systems, Inc (CSCO): Network Equipment. Cisco was due to report results this week. Talking heads were expectng good things. With closing price of $48.46, I sold a November 22 strike 45 put option to straddle results. If results are good price will stay well above $45 and I get to keep 0.45% premium for 7.7% price protection. As it happens results were acceptable but future guidance was a bit soft. Price did push below $45 = looks like I will be buying the stock at that level or buying back the sold puts.

Covered Calls

Out of 51 covered call contracts written, 15 were assigned. Adjusted average premium was 1.04% with 8.1% coverage ratio. I bought back 5 contracts as price was quite close to sold strike - of these 2 were bought back for less than sold premium (i.e., still profitable). Premium is adjusted for buy backs and naked calls or puts added to the covered calls (e.g., in one portfolio I sold more LYFT calls than I was holding stock)

Naked Puts

Naked puts on 4 stocks expired out-the-money (HON, MCD, REMX, ROKU). I have already replaced the ROKU puts and will review the others for December or maybe even January expiry.

Cryptocurency

Bitcoin (BTCUSD): Price range for the period from November 13 was $476 (5.4% of the high). Price stayed below resistance at $8891 and spiked lower to test support at $8400 and held above (just).

Ethereum (ETHUSD): Price range for the period was $13 (6.9% of the high). Price moved in tandem with Bitcoin to test down to $177 support on the same day and has since held above with a little more conviction.

Ripple (XRPUSD): Price range for the period was $0.02453 (8.9% of the high). Price rejected resistance at $0.27735 and pushed below the $0.26 level before finding some buyers.

One new trade opened on a pending order looking for a reversal on 4 hour chart with trade taken in by the spread. Reversal did not confirm. Exposed to 160 contracts.

Po.et (POEETH): Po.et token is being migrated onto ECHO network. Process for conversion has to happen off exchange - started the process of migration. Minimum transfer size is larger than the holding I have and the transfer fee is high. Idea was to sell for ETH. Minimum order size was such that I could not sell - had to buy another slice and then sell the combined lot.

CryptoBots

Profit Trailer Bot No closed trades. With the high volatility of ETH and BTC prices altcoins have not been doing well.

New Trading Bot Trading out using Crypto Prophecy. No closed trades

Currency Trades

Outsourced MAM account Actions to Wealth closed out 15 trades over 3 days for zero profits for the period. Trades made short on FTSE100 did work profitably (3 out of 5) but they did have to pay away the dividend. Trades open on AUDCAD, USDCHF, NZDUSD, AUDNZD and UK100. (0.38% positive)

Cautions: This is not financial advice. You need to consider your own financial position and take your own advice before you follow any of my ideas

Images: I own the rights to use and edit the Buy Sell image. News headlines come from Google Search. All other images are created using my various trading and charting platforms. They are all my own work

Tickers: I monitor my portfolios using Yahoo Finance. The ticker symbols used are Yahoo Finance tickers

Charts: http://mymark.mx/TradingView - this is a free charting package. I have a Pro subscription to get access to real time forex prices

November 13-17, 2019