NaughtyPines

OPENING: TBT AUG/SEPT 37/33 UPWARD CALL DIAGONAL

Long
AMEX:TBT   PROSHARES TRUST PSHS ULTSH 20YRS NEW
... for a 2.62/contract debit.

Metrics:

Max Profit on Setup: $138/contract
Max Loss on Setup: $262/contract
Break Even: 35.62 vs. 35.69 spot
Debit Paid/Spread Width Ratio: 65.5%

Notes: Basically, shorting treasury strength with the inverse instrument ... . Here, I'll look to take profit somewhat quickly, since I've only got one roll opportunity with this setup. I ordinarily like to do these as skip months (e.g., August/October) to give me more time to be right and more roll opportunities, but there is no October expiry available yet. You can naturally look at doing a similar downward put diagonal in TLT .

Comments

Are you looking to close this with a 25% profit goal? Thanks my friend!
Reply
NaughtyPines kevagonia
@kevagonia, I generally shoot for 20% max on these, but we'll see how it goes ... .
Reply
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