jay_beckner

I play poker and trade options, seeking edges from study, reflection and analytics.

#021 SLB Calls Closed Loss

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Trade Details: Sold to close 5 May 26th Schlumberger Ltd (NYSE:SLB) 72.5 calls for $0.46 (in at $0.64 for 5 days), $222.52 total proceeds. The trade executed at 15:40:30 when the stock was approximately $72.15.

Return: (32.2%) after commissions

Note: I tried closing this position twice before today. On Friday, I raised my stop/limit order to $0.55/0.53 when the stock pushed modestly higher, but it failed to execute as the stock tanked into the close. (I didn't have visibility into the price or spread due to my delayed/not working quotes and couldn't adjust.) I tried again to protect my capital >>don't laugh<< on Monday, but I failed to get a fill in the low $0.40's as the stock sold off into the close -- same problem.

SLB stock chart, 30-minute interval.

SLB stock chart, 30-minute interval.

The stock story seemed to strengthen today. The short-term technicals, as shown on the chart above, turned up, and the stock moved higher out of a symmetrical triangle pattern. Volume in these weekly 72.5 calls was about 4x open interest by noon, and oil continued to strengthen as shown in the charts of WTI and Brent crude below.

Daily charts of WTI and Brent crude oil.

Daily charts of WTI and Brent crude oil.

Had SLB shown strength with a push through and close over $72.31 (short-term resistance), I would have held overnight alongside the presumed new contract holders. But, it fell again late, and I dropped my contracts at the bid which happened to be $0.46 when I got the fill alert -- again, no visibility... I would likely still be in this trade had I bought the June monthlies, but there is too much price and theta risk to continue to hold the weeklies here.

No matter how you look at it, the energy sector is bearish. Even if it breaks out of the downward channel, there's the bearish harmonic bat pattern forming...

No matter how you look at it, the energy sector is bearish. Even if it breaks out of the downward channel, there's the bearish harmonic bat pattern forming...

I am definitely feeling the constraint of capital, but I'm confident, as I work through these trades, that when it comes again I'll be ready.

Status: $222.52 account value, ($727.50) YTD loss

I get my hands on a dollar again,
I’m gonna hang on to it till that eagle grins.
— Eric Clapton

#022 BIDU Puts

#021 SLB Calls