Gary LeBlanc

Feb 25 2020

 Bought 5 May 58 calls at 40 cents. Currently the May contract is at $50.04.

Following along... looks like your b/e on each series is +/- $50.00

 

Yes. The actual Net Purchase price is $49.75. Lets see how I do. The target for the 5 May 58 calls is $1.50. Saw API as being neutral and the current sentiment as very bearish. These things change it just takes some time to become old news.

Yes... you may be right about CL basing. It held up fairly well today with everything else dropping (falling knifes).

 

Edited February 26, 2020 by OilProspector

Gary, does RBOB April PCPR, 3.23 indicate that a trend reversal is coming soon ? I never seen it so high.

Mario: It indicates the the options market makers can make up to $100,000,000 in RBOB put options by stabilizing the price with an upward bias. 28 days away though. WTI's Apr PCPR is not as high as RBOB's but the options pool imbalance is much bigger and options for WTI expire sooner.

Edited February 26, 2020 by Gary LeBlanc

Thank you

Gary, your gonna need a longer ladder... you still have 18 days for some sort of recovery. Plenty of time. ((Sine) wave cycles have been just wonderful over here... reminds of the old dot-com days. Easy money. But this too will soon end but gotta take advantage while it lasts.)

Lost 68.5% of my entire account in 2 days

29 minutes ago, Mario Andretti said:

Lost 68.5% of my entire account in 2 days

Lost or just unrealized losses ?

Lost

Yesterday was my worse day because i lost 60% of my own money that i started with.

Beginning in the middle of January 2019 until yesterday i made profit somewhere between 600~700K in total using a very basic method without stop loss. My best performance was during  middle of January 2019 to beginning of April, made 205K profit. Since April last year I started have big down days followed by weeks of up days. I would gain than loose more and more. I'm a newbie, I have a full time job and cannot watch the market nearly 100% of the time when i trade, using my method required me to watch near 100% of the time, this is one factor for my losses.

I made huge mistakes not protecting myself with stop losses, or selling in very small losses, I was not disciplined, no game plan, zero education on subject, learned by trial & error & reading online and I have no patience.   

I may quit trading.  My only option that i may try if I don't quit is Gray's strategy. I believe that it is far safer and would work better for me since it does not require to watch the market as much. I wish i adopted Gary's strategy earlier but i did not understand it well. If I did, my losses, if any, would have been significantly less and negligible.

Mario: Rule #1. No margin. I am not allowed to short WTI puts and calls while on margin. 

Edited February 28, 2020 by Gary LeBlanc

Feb 28 2020

If today was options expiration ( 17 days to go ) I would be Buying to Close the 2 short April 54 puts at $8.60. They were Sold to Open at $3.26. This results in a loss of $5,340/contract. Then I would sell the April contracts at the current price of $45.51. This results in a loss of $53.40-45.51= $7.89/contract. Then I would purchase 2 August ( already long 2 May, 2 June and 2 July ) contracts at $46.07 ( this is another loss of $.56/contract since it cost more to replace the 2 Apr contracts closed) and immediately Sell to Open 2 Aug 54 puts at 9.05 giving me a Net Purchase Price of $37.02. 

The loss going from Apr to Aug is ($5,340 + 7,890 + 560)/contract or $13,790/contract. August contract expires in 138 days.

Once the Corona virus gets contained China's economy will slowly get back to business and WTI will resume its $52-60 trading range until the next market interruption. Last year I was able to Sell to Open 58 calls at $3.00 on every position and expect the trend to re-establish itself. August options expire in 138 days. If I am able to Sell to Open 58 calls at $3.00 that will give me a Net Sale Price of $61.00 from a Net Purchase Price of $37.02 for a profit of $23,980/contract easily covering April trading losses. 

But options don't expire until March 17th so a lot can happen between now and then.

Edited February 28, 2020 by Gary LeBlanc

China's economy will not be the same after this.

At OP: Sure it will. Let's evaluate the situation. Virus attacks and kills however many. Which demographic is the hardest hit ? The elderly. They have a higher percentage of sick individuals and a higher death rate. Which demographic is the least productive in GDP terms ? The elderly. It's like pruning the dead leaves off a plant. Grows better. 

Edited February 28, 2020 by Gary LeBlanc

OpiProspector, can you provide reasons why China's economy will not be the same after corona virus ?

No one will put all their eggs in one basket. The US will now mandate that drugs, medical equipment and the such will have to have a percentage manufactured in the good ole' USofA! The laws already exists. My wife's company she represents (PCB's) has already sold off 4 China facilities last month. Work is coming back on-shore. Manufacturing will now be spread out and not be concentrated.

Edited February 28, 2020 by OilProspector

4 hours ago, Gary LeBlanc said:

But options don't expire until March 17th so a lot can happen between now and then.

Looks like if they can move the market up approx $10 in 18 days (however unlikely that seems, currently $44.80), they could save nearly $600M in April options payout, using todays numbers. That figure will change a bit daily of course, but wow

Rog1111: Seems like an amount the market makers would be interested in. 

Edited February 28, 2020 by Gary LeBlanc

Gary, did you dump your 6000 shares of UWT?

I sure hope you had a stop loss but then again oil will go back up eventually and since it is an ETN you can just wait for recovery.

I sold 2,000 shares at 8.60 and bought 3,000 shares of DWT at $5.43. Dumped those at 5.86 and bought back UWT at $7.40. Down from there.

Edited February 28, 2020 by Gary LeBlanc

4 hours ago, rog1111 said:

Rog1111: Seems like an amount the market makers would be interested in. 

😉

End-of-Week Results MTM... Hope recovery is in the cards!

 

March 1 2020

   Carnage for sure. Lets see how my system handles it. Long 8 WTI contracts and short 8 WTI 54 puts. WTI closed at $45.25 on Friday. WTI was down over 4% on Friday and the Offshore Drillers were up more than 10%. Bottom fishing ? Pre-emptive move in relation to OPEC+ news ? Very contradictory to say the least.

Edited March 1, 2020 by Gary LeBlanc

With a P/CPR of 3.97 I can see this, less more "bad" Coronavirus news, making its way back up with 15 days to expiration. 🤞

Edited March 1, 2020 by OilProspector

On 2/28/2020 at 9:08 AM, OilProspector said:

No one will put all their eggs in one basket. The US will now mandate that drugs, medical equipment and the such will have to have a percentage manufactured in the good ole' USofA! The laws already exists. My wife's company she represents (PCB's) has already sold off 4 China facilities last month. Work is coming back on-shore. Manufacturing will now be spread out and not be concentrated.

Too add... Supply Chain Shift Out of China Gaining Steam
https://www.theepochtimes.com/supply-chain-shift-out-of-china-gaining-steam_3255346.html

Professor Gary sky getting darker and ex China it’s just getting started . I was hoping to do the same strategy you do but will hold off till dust settle in a month or 2 . But GL on the Longs as I have a long bag myself .  However you are better hedge than all for sure . Watching as they play the game almost $6 range in one night . 

Edited March 2, 2020 by AKA

On 2/28/2020 at 8:38 AM, OilProspector said:

China's economy will not be the same after this.

At OP: Sure it will. Let's evaluate the situation. Virus attacks and kills however many. Which demographic is the hardest hit ? The elderly. They have a higher percentage of sick individuals and a higher death rate. Which demographic is the least productive in GDP terms ? The elderly. It's like pruning the dead leaves off a plant. Grows better. 

At Gary: In case you missed it...

Too add... Supply Chain Shift Out of China Gaining Steam
https://www.theepochtimes.com/supply-chain-shift-out-of-china-gaining-steam_3255346.html

So you should probably short the Chinese market if you believe what you read based on that. Are you ?