OPENING (IRA): SPY NOVEMBER 20TH DOUBLE BROKEN WING BUTTERFLY
I'm probably sticking this out there in too lengthy of a duration relative to the binary event I'm looking to play, but wanted to post it in the event I space the play out.
Pictured here is a double 4 x 2 broken wing butterfly. Due to its being an 8-leg position, I legged into the put side for a .35 credit and then into the call side for a .34 credit, for a total of .69.
Here are the metrics for the put side: max profit: 2.65, max loss: 1.65, with no upside risk. If price finishes above all three strikes (i.e., everything approaches worthless), I keep the credit received. Max profit is realized on a finish at the short put body at 302.
And for the call: max profit: 2.34, max loss: 1.66, with no downside risk. Similarly, if price finishes below all three strikes, I keep the credit received, with max profit being realized on a finish at the short call body at 351. The oppositional side is put on essentially "buying power free," so I got into the play for 1.66 of buying power with total credits received of .69, so if price just slops around between the short option legs, the profit potential is 41.5% ROC at max.
If the general elections turn out to be a "nothing burger," I'm fine with that, but am looking to take advantage of substantial movement to either side in the event it turns out not to be, either in run-up jitters or thereafter.
Pictured here is a double 4 x 2 broken wing butterfly. Due to its being an 8-leg position, I legged into the put side for a .35 credit and then into the call side for a .34 credit, for a total of .69.
Here are the metrics for the put side: max profit: 2.65, max loss: 1.65, with no upside risk. If price finishes above all three strikes (i.e., everything approaches worthless), I keep the credit received. Max profit is realized on a finish at the short put body at 302.
And for the call: max profit: 2.34, max loss: 1.66, with no downside risk. Similarly, if price finishes below all three strikes, I keep the credit received, with max profit being realized on a finish at the short call body at 351. The oppositional side is put on essentially "buying power free," so I got into the play for 1.66 of buying power with total credits received of .69, so if price just slops around between the short option legs, the profit potential is 41.5% ROC at max.
If the general elections turn out to be a "nothing burger," I'm fine with that, but am looking to take advantage of substantial movement to either side in the event it turns out not to be, either in run-up jitters or thereafter.
Trade active:
Out of the put side for .05/contract today. Price is in the right spot on the call side, but will have to hang out between 349 and 351 running into expiry to get something more than just the credit received.
Trade closed manually:
And out of the call side with 5 days to go for a 1.61 debit, resulting in an .87 ($87) loser. Looked promising for a bit, but today's Moderna news took the market even higher.