Results of December BUPS

I listed 7 Dec BUPS that I did 3 days prior to expiration. They were all sitting on support and if under certain conditions they went above certain prices, I decided I would get in, and so I did. After I listed the BUPS in my trading blog, I saw another one on PCU and entered that trade shortly.

PCU Dec 100/95, stop @ 100.60, for $0.90, 22%

None of my stops for these 8 BUPS got triggered. The market was overall bullish, which really helped.

Prior to the market open today, I entered orders to close all the short sides by entering a limit order to sell @ $0.05. Most of the order got filled within the first hr of the market, but a couple did not until later (MA and SPWR).

Commissions for me were $2.95/contract, with a total of 30 contracts, 2 orders to get in, 1 order to buy back the short sides, that was $265.50 in commissions for these 8 BUPS. Buying back cost $150.

Credits = $2,690.00
Comms = - 265.50
Buy Back = - 150.00
NET = $2,274.50

Margin Required = $17,810

% ROI = (2274.50/17810)*100 = 12.8%

Note: These are all practice trades done real time on the Think or Swim trading platform.

I did do 2 other spreads that were not successful.

One was a BUPS on RIMM that was Dec 100/95. After getting into that last week, on Wed it went ITM, so I bought back the Dec 100P. It was still a successful trade as I traded my plan, which was getting out if it went ITM. Of course, if I would've stayed in another day or so, this also would've been a successful BUPS.

But, the thing here is that my stop WAS triggered and I took myself out of the trade, because it was a thing of discipline.

I did have 2 BUPS on RIMM. Dec 100/96.** and Dec 96.**/93.**. The mistake I made here was buying the 96.** on the first spread was fine, but in the 2nd spread, I sold the 96.**. That was not well thought out until I looked at my TOS account and wondered what happened to my position.

TOS does not allow BTO and STO, whereas my funded account broker, BX, does have that so you would not have a "canceling" type thing going on. Anyway, so the spread actually became a Dec 100/93.**. Not what I was planning on.

Anyway, lesson learned here.

I did have a BCS (Bear Call Spread) on CLF, Dec 105C/100C. I also started this last week and everything was fine until yesterday 2 hrs before close, the position started to show signs of bullishness. Also, not a good thing, but my stop that was at $99, was not reached, but getting close.

Today not only was my stop triggered, but it went ITM, so I bought back the Dec 105C. This was also a successful trade, just not profitable.

Spreads stats for Dec for me:

1 costing BCS: CLF
2 costing BUPS: both RIMM
4 Responses
  1. Debbie Davis Says:

    Hi Doris,
    I use Thinkorswim and they buy back the short side if it's worth $.05 or less with no commission charge. You probably know that. When I put one on, I automatically put in an order to sell at $.05 since it would be free and it frees up my account.

  2. Doris Says:

    Thanks Debbie. I didn't know that, but that's good to know!!!!

    So once your BUPS or BCS is taken, you put in a sell order for $0.05? Do you put in a contingent sell order for a stop if your position should go against you?

  3. Debbie Davis Says:

    I don't usually Doris, but you can do that on their platform. They have a lot on there that people don't know about. For instance, if you want to put a stop on an option if a stock trades at a certain price, you can have the order execute when the stock trades at or below or at or above a certain price, and then place the option sell price at the mark (midprice) minus a certain amount. I look at the normal spread on the option and then move my sell price slightly off the mark (-$.05 or $.10 depending on if the option trades in nickels) so that I don't get killed by the spreads when the price is moving against me.

  4. Doris Says:

    Thanks Debbie. Yes, I do use contingent orders all the time on TOS in my normal directional "BTO" trading (momentum and/or trend plays).

    My concern was if the stock moves to be ITM, would you get out of your spread or would you stay in? I spoke with a trader that allows it to stay ITM for a period and he's never had the stock put to him.

    That seems sort of dangerous, to me. I forgot to write about the 2 positions in Dec that went against me and how I could've done them better. I still traded my plan perfectly, but one of the costs was a lot and wiped out the profits of most of my profitable BUPS, so obviously, I want to perfect this and better understand how to minimize my costs.

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