Brook Reef

Covering XLF short via $38, 2/11 puts for $0.84 Realized gain of $0.22 (35.48%) I threw on a stop loss order this mornings for the position and it got hit on this mid-day rally. I planned to close the position ahead of the weekend anyhow given the time premium that burns off over 2 non-trading days. This was a fairly small position (0.31% of capital) though had huge leverage given the strike price. 35.48% x 0.31% = 11bps of gain for the portfolio. Not bad!

Selling NFLX @ $385.33 Realized gain of $14.12 (3.80%) Remember that discussion about catching a falling knife and trying not to get hurt? I'll jump out of this falling knife catch unscathed. Carl Icahn has rented an auditorium to present his short case against Netflix tomorrow (1/28/22). If his presentation is compelling, the stock could be weak. If he's not, it could go up. I don't need to be involved with an icon like Icahn throwing rocks. Plus, the broad market keeps showing weakness and Netflix isn't a high conviction idea. I'm trying to position myself to have (mostly) holdings that I believe in and am excited to own, not trade. But sometimes, trading is fun! I'm hunting for more ideas like T, GTY, EIX, NNN, etc...

Buying T @ $23.72 2% position AT&T has long been a high yielding dog of a stock. On one hand, it's a dividend aristocrat - growing the dividend for 50+ consecutive years. On the other hand, they've loaded up on debt and disappointed shareholders for a long time. They've probably destroyed a lot of value with the various transactions. But that's yesterday's news. AT&T is spinning their TimeWarner business with Discovery. T shareholders will receive shares of the new company and own 71% of it. T will also receive some $45 billion of cash. Post-spin, T will reduce the dividend from current levels. They're using the spin as justification - less cash flow means less dividends. But we can see past that - it's a true cut. But that's not a bad thing, per se. The dividend is expected to be somewhere in the $1.10-1.15 range. At this purchase price, that means a yield of 4.6-4.8%. While that's a pretty attractive yield, it ignores the value of the SpinC...

Shorting XLF via buying puts  $0.62 with a $38 strike expiring on 2/11 20% position, if exercised - 0.31% position @ purchase price There isn't a perfect short out there - I should have stayed short TSLA - but this one will have to do. Financials get hurt if/as interest rates decline.  Not sure how long I'll hold these puts - this is another of those "dirty day trade" ideas. Sorry, but I can't resist.  If you're not a frequent trader, stick with the long-term ideas I have like T, NWE, NNN, CAG, etc.

Selling 15% of 25% SPY @ $442.59 Realized gain of $13.83 (3.23%) Taking the Powell rally as a chance to lock in some gains on this risky trade. I went pretty big and will right-size the trade now. Stop on remaining 10% remains @ $420.67, though we'll see how sloppy today gets and adjust accordingly. Selling the Powell rally in stocks and buying the crash in rates is what I'm doing.

Buying NFLX @ $371.21 2% position They say not to catch a falling knife, but gosh is it tempting. I'll let myself buy a small slice of the cratering Netflix stock - down from somewhere near $525 before earnings to today's level - just about 30% down. Is Netflix a screaming buy? No! It made about $11/share of earnings - which means it trades well north of 30x P/E. Not cheap. Growth is slowing and perhaps over. But this isn't Uber or some other wild, unprofitable company. Netflix could stop spending so much on content and forget growth to just milk those of us who watch it every day. Sure, raising prices could lose users. But to what extent? If Netflix gets down to a market multiple, I'll buy aggressively. For now, this is a falling knife that I hope doesn't cut me.

Buying SPY @ $428.76 25% position I'm not trying to make this a day-trading guide by any means. But the signals are noisy and confusing - and volatility reigns supreme right now. The intra-day reversal off of the lows and subsequent move to highs of the day is a decent buy signal, for a trade. Plus, the markets have been down for 7 consecutive days and could have an up day. The trading service I subscribe to said to buy again (for the 3rd time) after getting stopped out on the first 2 signals. Buy SPY @ $428.76 STOP @ $420.67 (-1.89%) Target: $464.00 (+8.22%) While you might scoff at the buy signals getting stopped out, the total loss on the 3 trades (if this gets stopped too) is 2.56%, 1.18%, and 1.89% = 5.62%. On just 25% of my capital. So really a loss of 1.4%. How much are you down in this selloff?