[Options] June Positions Review

Sean McLaughlin
June 1, 2020

As June gets under way, it’s time to review positions with June options that remain open (haven’t already hit profit targets or been stopped out).

Most trades I put on for All Star Options tend to have a minimum duration of 30 days (short premium plays) and often as long as 6-8 months (for long premium plays). As options approach expiration, greeks like theta and gamma start to become my enemy and whipsaw my P/L. Therefore, as options and spreads get into the expiration month, my best practice is to put each position on notice — it’s time to take action.

This month most of our positions with June options have already closed! No surprise considering we put on a lot of shorter duration short premium plays in the weeks and months coming out of the coronavirus bottom and they quickly met their profit targets as vol collapsed or one way markets took us out at stop losses. Additionally, we had a bunch of longer duration plays put on before the pandemic market hit and many got stopped out during the market plunge.

Here's the scoreboard:

June positions closed for profits: $AEE (2/10), $GOOG (5/7), $CAT (5/12), $GLD (5/13), $XLU (5/19).

June positions closed at a loss: $FB (3/4), $SQ (12/31), $CSII (2/10), $HON (2/26), $ICE (3/2), $SMG (3/2), $AMZN (5/20), $XLI (5/20)

Remaining Open Positions:

  • $CME Long June 220 calls: I entered these calls on January 17th for $4.80. Things were going our way and I was able to sell half at a double ($9.60) on January 31. Good thing, because while making another attempt at higher prices in early March, $CME eventually succumbed to the broader market sell off and never recovered. Still holding half of my position but these remaining calls have a zero bid. Nothing to do. This trade will end up being a scratch unless something magical happens in the next few weeks. Basically holding lotto tickets here.
  • $FDX June/July 100-Put Calendar Spread: Looks like our short June 100 puts will expire away worthless. Nothing to do but wait for that to happen. In the off-chance FDX sells off to $100/sh before our June short puts expire, then I'll close the entire spread there and book the sure profit. Assuming that doesn't happen, the June puts will expire away worthless and then I'll be holding a long July 100 Put and hoping for a selloff into July!
  • XLF Long July 17 Puts: Financials never collapsed like we were hoping. Looks like this trade is a bust and the long puts will expire worthless. Nothing much to do here. Like $CME above, we're just holding lotto tickets at this point.

Stay healthy!

~ @chicagosean

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