Getting the 2017 Party Started

The cliffhanger last time involved the $6.50 put for UVXY expiring this Friday, January 13th.  I had sold twenty contracts on January 4th for premium received of $0.18 each.  It turns out that I got nervous about this put when UVXY touched 6.57 later that day.  I knew I had time, but I also believed that the nature of UVXY was not on my side, and I began plotting to trade out of these options and eventually replace them with more advantageous ones.

It turns out I didn’t have to wait long.  See the dip in option price the next day wherein I and apparently just a few others traded at eighteen cents, thus ending my obligation with this option before the price took off again for higher ground through today.


What happened to the 1,400 shares of UVXY (which, as you’ll recall, made these options partially clothed, although uncouthly underdressed)?  After buying back the puts, I witnessed UVXY slide down an intraday hill to the low 6.70 range until I could not stand feeling “out of the action” and I sold 600 shares short at 6.74.  Ironically, this brought me up to the grand total of 2000 shares of UVXY I would have needed to support those puts as fully covered.

Right now, (as I write on Wednesday, January 11th around 3PM), UVXY is 6.17.  So what have I spun from a 57 cent drop in UVXY since January 5th, four trading days ago, when I had 2000 shares short at that time (but, you’ll learn, I no longer do)?  Get out your calculator and you’ll figure that, had I simply held those shares short through this moment, I’d have an $1,140 profit just on those shares.

The next day, January 6th, I bought the most recent 600 shares back to cover, immediately regretting it, but netting an even $100.  The regret stemmed from the additional gain I could have realized by waiting until later to close the short.  I then shorted other securities as a balm to the pain, but came home with nothing.  I usually don’t detail such mundane happenings, but if anyone wants to see it, the combined escapades that day looked like this:

Before that day was over, witnessing UVXY dip all the way down to about 6.23 and back up, I shorted it again at 6.50, only “losing ground” by about four cents from my last transaction in which I had closed it at 6.54 in the morning.  What happened after January 6th?  Only two full trading days elapsed after that, and today is still in progress, but the transactions were too numerous to narrate full stories on.  Instead, I’ll give an accounting, excising another group of failed TNA shorts.  If anyone really wants to see that embarrassing sub-story, it’s right here:

Here’s the accounting breakdown:

So, with $200 slipping between my fingers there, let’s detail the remaining transactions to date, first the UVXY and then some TVIX short I acquired on a few different dates so far this year.  The UVXY:

The green box shows the profit taken on the 600 shares shorted as an attempted continuation of the same short started when I closed the options.  The red-ringed lots represent the closing of shares shorted on the first trading day of the year.  And the remaining lots were opened this week and closed this week, through today.  At this moment I have no short shares of UVXY. What’s not shown in that chart is that I was unable to borrow some shares for shorting today, and used TVIX as an alternative, and I also used TVIX intentionally two days ago to add to an existing pool of TVIX shorts I began accumulating before the year started.  The lots sold short this year were transacted at the following prices:

TVIX is currently 6.68, so my unbooked gain on the above is, right now, $560.  Disregarding profits I took on shorts started on the first trading day of the year, I only brought in a little more with all of my shuffling of UVXY shares, and would have been better to just hold the 2,000 shares since January 6th.

One of the goals I achieved today, however, was to lighten my exposure to combined TVIX/UVXY short shares by cutting it in half from a somewhat overweight position at the end of yesterday and a very overweight position this morning as I “doubled down” to try to get out of yesterday’s “mistake” faster.  It worked; I got out unscathed, but as of this writing, UVXY/TVIX continue to drop along with VIX wallowing around in the low elevens, so I’m looking at profits missed out on today and feeling irritable.  I have to remember, though that it’s essential for keeping my account intact that I make sure I’m out of the way if the train changes directions.  To mix metaphors, I’d like to have fun at the party, but it’s more important that I get home from the party alive, even if that means leaving while it looks like the party is in full swing.