Trading: 04-01-2016

8:00: Really good cold shower this morning. Already feeling relaxed, refreshed and pumped.

8:51: Cut the meditation 4 minutes short. Felt relaxed enough. Think I can probably lower the time of meditation to 15 minutes. Time can be somewhat valuable at this time of the morning, and at this stage that's probably my saturation point.

9:09: Got a good nail on NUGT premarket for $150. Given that I currently have 3/3 positive days this week, I don't want to force anything. Really important for me to lock in a 4th day for confidence reasons. So focus on small losses, no stubbornness, and taking quick profits.
Regardless, I will probably have to hang around all day because of the SUNE hedge that I need to have on for the end of day close.

9:57: Good morning. Slowing down now. Have managed to get 1000 shares short SUNE with 0.5050 average, and have locked in $13. Am happy enough with this as I don't mind bag-holding 1000 shares compared to 2000 - will sell calls against the 1000 if SUNE still below 0.5000 at the end of the day. They are currently going for 13c, which seems pretty good to me. Taking into account calls, even if I didn't get exercised on them, end of next week average long price would be 0.3000 - which is getting down to where I would consider getting long for the bankruptcy rally anyway.

10:10: SUNE requiring a lot of focus. That being said, you would only expect that in maybe 1/10 of these trades, so when you have to do it, it's worth it big picture. I closed my short hedge into 0.45. Now trying to cover the options I wrote around breakeven - which on net after taking into account the hedge would leave it as if the options had expired worthless.

10:12: SUNE has popped nicely off the low. The option bid not really dropping though, so may have to get short some SUNE instead if the option bid keeps refusing to drop. This type of action is exactly why I thought I had to focus on providing liquidity with the hedge - despite it being hard to do.

10:14: Chased an add on NUGT lower. As is usual recently, gold A LOT weaker. It's crazy how much weaker today, so happy to try and be there for the NUGT all day unwind. Adding allows me to get some profit locked into down-move, rather than just holding.

10:18: Should probably have just shorted SUNE there when it became obvious wouldn't get the fill on option. That being said, have all day and premium should decay throughout the day. Bid may not have dropped now, but 2 hours from now on the same action and it might. Again, whole plan should be not to panic and focus on providing liquidity.

10:38: SUNE bid still not really dropping despite a really decent pop in SUNE. Forced to re-establish short around 0.49. Seems somewhat like an SSR rally, given difficulty to get fill when I tried to do it at market. Again same plan cover into 46s.

10:48: SUNE. Almost looking like I should just hold the puts. The 4c bid just not dropping, and doesn't make sense to pay that much for it. Am scaling back in the hedge. A great cover on the hedge at the low. Covering that low, and then the resulting pop has allowed me a tonne of flexibility now on how to manage going forward.

10:50: Have mistraded GNCA this morning. Not enough taking profits, and not enough effort to get in at good prices. Long and short both would have worked if fading moves. Volume still extremely high, so despite looking bearish, if it vwap reclaims can easily go to high of day like yesterday.

10:52: NUGT - think there should be a big trade in this as an unwind at some point today. Will try to maintain as much flexibility though, so that can add into any fake upmove. Gold is consistently trending lower, while NUGT is sort of consolidating after a pop off the lows.

10:55: Pretty frustrating to still not having a fill on SUNE puts, despite it being at 50c. What are they going to announce bankruptcy midday? Yeah right... Still, will trade this hedge around a core until get fill on option cover.

10:57: Added full size NUGT with gold rolling over slightly. yes I have reduced my flexibility, but really like the trade. Clear stop as well.

10:58: TSLA made a lot @ $235 and bounced pretty hard, then came down to retest it. Should have been aggressively long on that. Very clean and obvious setup, somewhat annoyed I didn't take it.

11:07: So my stop plan is somewhat complicated on NUGT - am mentioning it because complicated stop plan can lead to stubbornness. It is gearing up, but gold isn't. If NUGT breaks out without corresponding move in gold I will not cover until gold follows and/or NUGT doesn't fail quickly. If god follows cleanly will stop immediately.

11:13: GNCA working. Would not be surprised to see this go r/g and over the high, however, unfortunately I didn't make enough money on it this morning (didn't make any!) So am forced to trade it light and lock in profits early.

11:14: Gold not following the NUGT breakout. Need to be careful, so if the NUGT still holds will stop out. However, this is exactly why you have complicated stop plans sometimes.

11:20: Gold turning lower, NUGT breakout failed. Beauty. Really nice to see a plan like that come together. Ideally I would have added into the fakeout which would have provided an incredible risk-reward entry, but oh well.

11:30: Just reviewing a few things, after today will be 4/4 profitable days in a row. If profitable on Monday will be able to increase full size by 10% which would be pretty good!

11:34: Just waiting to cover down some size on NUGT then will take a nap. Need to reset and look forward with fresh eyes. By the looks of it am still going to be battling SUNE for the afternoon. Also some good potential trades setting up for the afternoon.

11:39: Possible gold strength after a wick lower. NUGT looks super clean for move lower after fakeout, but gold breaking downtrend. Not looking to be stubborn here, as the two moving together acts as confirmation. Important to note that hitting the stop here results in a better exit than if I had hit the stop on the false breakout (despite gold being higher). Have put in a hard stop, which would be where the one that would have got faked out on would be (about 50c above current price). With all the faking action want to ensure it actually gets above a level before I stop, plus it means I can nap now.

12:20: Stopped on NUGT, and my starter on GNCA. A potential few trades setting up, but will finish day-trades on that note. Only management of SUNE hedge to go.

12:22: Quite interesting. If I wanted to draw out my position to get long SUNE at a better price, I could roll my 50c puts (close at 4c and lose 1c) to next week and received roughly 16c, net of roll would be 12c. If I wasn't so absolutely convinced that SUNE will go bankrupt very shortly that seems like a free lunch. Even then, what is it going lower than 35c? Not really, on actual bankruptcy news it probably goes to 10-25c range, so being long from 35c really isn't the end of the world. Anyway it's just interesting.
For today, there is massive open interest at 0.5c so may be reasonable to expect a peg to 50c. That may explain my difficultly in closing my puts. May be better to just let them expire. I also notice that there's a lot of shorts (SSR is on so you can tell) which is somewhat unusual given the price. It is most likely market makers getting short ready for delivery of stock tonight.

1:20: So the problem with it being pegged. Do I go home with a hedge or not? Based on the action, I do not expect it to close below 0.48, so it is not worth covering my options at 2c, given that I still can't get a fill here with the stock price at 50.5c. So building back hedge to max size. Post 2pm I will give up on trading around my core hedge and hold 1000 shares short. That seems the best way to do it.
So come Monday if closes below 50c I will be long 1000 shares, and can easily flip them into the 50c mark. I do not believe there is much risk to this, except for the actual bankruptcy filing because the flow of bad news can't get any worse.
Or I will be short 1000 shares, which there is probably some risk to... But whatever. Seems a good way to balance it.

1:35: SUNE having a bit of an attempt at r/g push. Is now at prices that make me relatively confident it doesn't close below 0.5000, so will be happy scaling short into upmove, then covering out at breakeven. It would make sense to close the hedge out now. But as mentioned multiple times; very important to be counter-trend to some degree on the hedge. Otherwise just end up chasing prices, ruining averages etc etc.

2:17: Closed up the last remaining part of the hedge at slightly worse than breakeven (0.5050). Think it has a reasonable chance to go below 0.5000, so I maybe should have saved some for there. From here pretty 50/50 where it closes but will certainly be close to 0.5000. Overall am +$48 on the hedge, so that amounts to 2.5c on 2000 shares. So if I get exercised on the puts I will be long with 0.4470 average. Will try sell as close to 0.5000 on Monday as possible.

2:22: First time I have ever had to hedge a position like that. Quite weird thing to do, but pretty happy with the end result I think. The most important moment was covering my short down at 0.45 support. The biggest mistake was not recognising the gearing pattern (thinking, oh I need to be short), and adjusting so that could use the gearing pattern to short higher.