Trading Alert – Calling a Stock Market Crash Between End of August, End of September

I explain why here.

Read that first.

Yesterday I entered the following positions in order to prepare:

4 contracts XBI Sept. 15, 2017 61 PUT, at $0.19 a contract, total cost $76

17 contracts XBI Sept. 15, 2017 62 PUT, at $0.21 a contract, total cost $425

From July 18th, 2015 (today) to the low on August 24th, 2015, XBI fell 33%.

I’m expecting something similar to happen again. My guess is August 27th but it could be any time before October.

If what happened then plays out again, the target low on XBI will be $52.50.

At that price, the 61 PUTs will be worth $8.50. The 62 PUTs will be worth $9.50.

Total risk = $501

Maximum gain on 61 PUT: $3,324

Maximum gain on 62 PUT: $18,801

XBI on August 24th, 2015:

Model Portfolio Update

For anyone who has been following my trading game, the model portfolio is way up. See the model portfolio page on the menu bar. I closed the SPY call option position for a small loss. The contracts expired in the money, but not enough so, so we took a $480 loss. I added one contract of SRPT January 20, 2017 $50 CALL for $190. The big FDA decision on Eteplirsen is due in 10 days, and there is a chance it will be approved. If it is, that contract will become much more expensive.

Since everyone is focusing on options expiring next Friday since the FDA decision will be in by then, the longer dated calls are at a significant discount, so I bought one.

Total notional gains for open positions in the model so far are $19,000 flat plus realized gains from closed positions of $2,480, for 21.5% gains so far. Each individual position is as follows.

Portfolio began 9/21/15.

Open Positions As of January 5, 2016

$5,000 QQQ at $99.97/share – ADDED 1/20/2016, current gain $341.

$9,000 CVX at $76.97/share w/5% dividend – ADDED 1/20/2016, current gain $2,938.

$500 GLD JAN 2017 225 CALL  @ $0.13/contract  – current loss $154

$10,000 CORR at $25.80/share w/9% dividend – current loss $1,143

$10,000 CORR at $15/share with 17.7% dividend – ADDED 12/29/15 – current gain $5,220

$500 TLT JAN 2017 $95 PUT @ $3.00/contract – current loss $500

$30,000 GG at $13.40/share w/1.1% dividend – current gain $11,574

$10,000 POT at $17.80/share w/8.54% dividend – ADDED 12/29/15 current loss $1,033

$10,000 888.L at $2.72/share (183.5 pence) – ADDED 12/29/15 current gain $1,757

$190 SRPT Jan. 20, 2017 $50 CALL – ADDED 5/16/16

$17,330 CASH

Total notional gains $19,000 flat

Closed Positions

$20,000 CVX at $78/share w/5.5% dividend – SOLD 10/8/15 AT $89.72/SHARE FOR $23,000

$3,000 SPY APR 15 2016 203 CALL @ $5.95/contract – CLOSED 4/15/16 FOR $2,520

TOTAL As of May 16, 2015 – $121,480.

Total realized gain 2.48%, Total notional gains 19%.

Rounding down for commissions.

Additional information: This is a game, and I am making no recommendations.