Options Opportunity Portfolio Review (OOP):  It's been a quiet month, with just 3 new trades (XRT, MO, SCO) including one we just made today.   The last review was Aug 17th and we stood at $311,063 which was a pullback from our July 18th high of $325,753 so we decided to get more bullish and now we're back at $321,930 – up $10,867 for the month and up 221.9% overall in the first month of our 3rd year.  

We've been very conservative this summer and we're only using $43,500 of IRA margin – so no impact on our buying power, which is over $600,000 of ordinary margin.  That leaves us flexible enough to handle whatever the market throws our way going forward.

With North Korea threatening to nuke Japan and the US this morning, I'm back to being concerned as to whether we are covered well enough – in case of catastrophe.  No, I don't think he'll actually do it but we could end up with a Cuban Missile-like tension situation in Asia because Japan cannot let a threat like that go unanswered from their next-door neighbor – especially as Abe likes to present himself as strong on Defense.  

For those who are new, we transitioned this portfolio to more of a long-term portfolio as our first few months (back in Aug 2015) made us realize most people were not able to follow active trading due to the platform restrictions at SA.  We've moved towards a hybrid portfolio that mirrors the style of PSW's Long-Term/Short-Term paired portfolios, which relies on long-term positions, short-term premium selling and hedging to create a steady income stream.  

• CHL – Right at the money and it will expire on Friday.
• NLY – On track but a long way to go.  With the Fed next week, I prefer to take the money and run, rather than risk giving back our gains so let's kill this trade.  
• WTW – Not worried about them at all, just waiting to collect our last $800.  
• FXP – Our short China hedge failed for the summer.  May as well salvage what's left on the long $22 calls and let the short $26 calls expire worthless.
• TZA – Our primary hedge.  The net of the hedge was $3.35 and we can still salvage $2 from the Jan $15 calls so let's roll them to the April $14 calls at $3.35 for net $1.35 ($10,800) and we've paid for another 3 months of insurance while gaining $8,000 in strike protection.  If TZA hits $20, the April calls will be at least $6 for $48,000 vs their $26,800 current value so this is about $21,200 in protection against a 10% market drop but, more importantly, it's $48,000 of ready CASH!!! right when we'd need it most.  

• SVXY – We hopelessly wait for the VIX to turn up.  It never happens but it's fun to hope!   The Sept hedge will expire worthless and the Dec spread – even if it pays in full, will only turn a small ($3,500) net profit – even if we hit it finally.
• SQQQ – Our other big hedge was already rolled to March but up and up the Nasdaq goes.  The March $26 calls at $3.70 can be rolled down to the $23 calls at $4.90 for net $1.20 ($6,000) and we'll make that cost up later with a call sale as the Jan short calls wear down.  A 10% drop in the Nasdaq would pop SQQQ 30% to $35, which would pay $60,000 vs the $24,500 current value so $35,500 protection on this hedge. 
• F – Right on track (we're in it for the dividends).  In fact, let's double down as we're going to let GM go. 
• AAPL – This one gives us violent fluctuations but essentially right on track.  The Sept $140 calls are $19.15 and earnings are the last week of Oct, so after expirations.  The Oct $140 calls are $19.60 and I still want the protection so let's just do a straight roll to those.  

AAXN – I'm tempted to buy back the short calls as it had such a nice drop but, as I'm worried about the overall market – let's just keep our powder dry.  Great for a new trade.  

ABX – On track and not at all worried. 

ATI – Wish we had more.  On track.  

CDE – On track, not worried.  

CHK – I like this for a bottom.  They are going to make at least 0.50 this year so $4.14 is silly cheap and maybe 0.75, which makes 8x $6 so let's buy back the short 2019 $10 calls (0.18 was last) and roll our 20 $5 calls (0.85, $1,700) to 40 of the 2020 $2.50 ($2.15)/$5 ($1.15) bull call spreads at $1 ($4,000) so we're taking and $1,800 loss and spending $2,300 more to move from 2019 $5/10 spreads that would have paid us $10,000 to 2020 $2.50/5 spreads that also pay $10,000.  Our upside at net $4,100 (not including short puts) is still over 100% despite CHK being a big disappointment so far.   Good for a new trade, of course.  

• CLF – On track.  
• CSCO – On track and good for a new entry but I hope it gets cheaper (and we lose money), so we can add more to our position at lower prices.  

DBA –  Well, the good news is there's no food inflation.  2020 is out so let's roll our 20 2019 $17 calls ($2.85) to the 2020 $15 calls at $4.85 for net $2 ($4,000) but it will take a while to fill as the 2020s are barely trading.  Make sure you get a good price in 2020 before selling the 2019s as we strongly believe DBA will go higher.  

DIS – Let's buy back the Jan $105 calls at $1.45 and take advantage of the low price to sell 10 of the 2020 $85 puts for $6 ($6,000) and I'm not at all worried about the short 2019 $80 puts ($2.65) but let's put a stop at them at $4 so our worst case is we gain net $2 in our pockets.  Our 2019 $90 calls are $13.20 and the 2020 $90 calls are $16.20 but if DIS goes higher, our $90s should gain faster, so let's hold off on that roll.  

FNSR – They took a big dip but not too much damage so let's take advantage and roll our 2019 $23 calls ($4.50) to the $18 calls ($7) for net $2.50 and buy 5 more for 15 total. 

FTR – They just paid us an 0.60 ($480) dividend today, which is not reflected yet.  Since the net of that trade was $14,888 and we're collecting $1,920 (12.8%) in interest, it's hard to get upset just because the stock is down.  Because of ex-dividend, they are down 0.92 today and that's the 2.5% Rule so let's take advantage and buy another 1,200 shares of stock at $12.82 ($15,384) and buy back our 6 short 2019 $15 puts ($6.70, $4,020) and sell 20 2019 $10 puts for $3 ($6,000) and let's buy back the 5 short 2019 $15 calls at $1.40 ($800) and see if they can bounce back. 

Long-term, we expect FTR to be a 10% dividend payer.  At the moment, they are paying 20% so either they will cut the dividend to save cash and pay down debts or the stock will jump back to the $20s and that will make the dividend effectively 10% again.  Either way, we just gained $900 on 5 calls we sold in July and $120 on the short puts so that's $1,020 plus the $480 dividend today is $1,500 back this quarter against the $15,384 net cost is on track to pay back 40% of our money in a year – of course we want to double down!  

GE – Fairly new and still good for a new trade.  

GM – Way over our target.  Max payment on the spread is $12,500 and our net is currently $11,535 so why wait 16 months to collect the rest?  Sadly, we'll let this one go (cash out) but we have F still.  

IMAX – On track.

JO – Perking up again.  

LB – Taking a pause at $40 and I want to wait for 2020 before making changes.  We're uncovered so aggressively bullish and I like them for a new trade.  

M – On track but we'll watch earnings closely.

MO – Hopefully it was a good bottom call.  New trade.

• SGYP – Just crossing our fingers on the next trial.  
• SPWR – On track.
• SVU – I think either they get bought or there will be a rumor that they are getting bought (almost as good), so let's buy back the 2019 short $25 calls ($3.20) and buy 3 more 2019 $13 calls ($9.30).
• TEVA – Not dead yet!  We just adjusted this so let's let it play out.  
• TGT – Way over goal already.  I wish we'd bought more.  Hopefully M follows suit.  

• TWTR – Also not dead yet and at our goal already but it's a net $8,000 potential spread and currently at $5,950 so hopefully another $2,050 (35%) coming to us between now and Jan so I guess it's good for a new trade – I just hate chasing things.  
• UNG – On track.  Not inclined to sell new calls yet and the short Jans will expire worthless, then we'll consider a new sale.  
• WPM – Our Trade of the Year is halfway to goal so on track.  
• XRT – That was easy money.  Also pays off in Jan and on track for the full $5,000 and currently net $2,700 so $2,300 (85%) left to gain in 4 months is still good for a new trade, even though you are chasing our quick gains.

We've slowed down our activity as the portfolio has matured and now it's turning into a nice little cash machine where our leftovers, like XRT and TWTR put us on track for thousands in quick gains while we wait for our longer-term trades to play out.  

Now we come into earnings season and we have tons of cash, so we'll do a little bargain shopping if we can and I'm pretty satisfied with our hedges – just in case this market actually pulls back one day.