Looking at an Iron Fly for Mas Tec. I am officially in "time out" from trading due to 7% realized drawdown in reg-T (barring open position adjustments) So this is just an idea to keep my mind in the game. Mastec was a big mover on the Trump talk of rebuilding America. Implied volatility is a bit anemic at 42% and 54 days to expiry is a long time to wait on a trade that decays slowly (butterflys and ratios) Managing at 25% would mean you would only want .50 cents if the trade was placed for 2.25 with the 39/42/42/45 strikes. What interests me for this trade is the large expected move of +/- 4.37 on such a small stock would be a 9.5% move. With V.I.X. overall being so low I have found these names to be actually moving past the E.M. recently. So in a practice trade I am going to test using the Iron Fly to see if I can get .50 by risking only .75 and also diversify my trades a bit...... we'll see what happens?
Comment:
Looks like market makers knew something here as this has taken off like a skyrocket......would have been a .75 loss if actually placed.