The account was leaning a little short delta from the SPY BWB Call Butterfly and today's gap up, so I wanted to add some positive theta and long delta to rebalance. All of these BWBs are essentially synthetic short calls or short puts, except they add just a little more bang for your buck and are little less heavy on the buying power for the little guy.
Trade Setup:
-1 QQQ Mar 17 128/130/130/131 Put Butterfly @ $0.20
DTE: 22
Max Win: $120
Max Loss: $80
Break Even: 128.80
Trade Management: I will look to take 50% off this trade if we hover around here until closer to expiration. The trade is structured so that if the Qs keep climbing, I can still walk away with the credit I received (No risk to upside). On down movement and risk of loss on this trade, my other trades will be near their max profit zones, so that basis is also covered some.
Green is profit zone (no upside risk); vertical bar is expiration.
Trade Setup:
-1 QQQ Mar 17 128/130/130/131 Put Butterfly @ $0.20
DTE: 22
Max Win: $120
Max Loss: $80
Break Even: 128.80
Trade Management: I will look to take 50% off this trade if we hover around here until closer to expiration. The trade is structured so that if the Qs keep climbing, I can still walk away with the credit I received (No risk to upside). On down movement and risk of loss on this trade, my other trades will be near their max profit zones, so that basis is also covered some.
Green is profit zone (no upside risk); vertical bar is expiration.
Trade closed manually:
Close for a .10 credit; $30 gain on the trade.
