USO Bearish Put Diagonal or Poor Man's Covered Put
After nearly 15% rise in the WTI price in recent weeks, I'm taking a small bearish bet on oil with reasonable odds over the next 46 days of a small pullback back 3% to under 14.50. Followed the trade idea shared by the fine work of Sir NaughtyPines (link below).
Long the OCT 17 put strike at 77 delta and short the AUG 14.5 put strike at 35 delta.
Paid a net debt of 1.90 which is 76% of the 2.50 width.
TOS shows a 15.25 breakeven, max profit of 120 and 58% POP by Aug expiry.
IVR 71% with IV 29%
Profit target of + 20% the initial debt for +0.38 at 2.28. Sold two lots to make it worth my time.
After nearly 15% rise in the WTI price in recent weeks, I'm taking a small bearish bet on oil with reasonable odds over the next 46 days of a small pullback back 3% to under 14.50. Followed the trade idea shared by the fine work of Sir NaughtyPines (link below).
Long the OCT 17 put strike at 77 delta and short the AUG 14.5 put strike at 35 delta.
Paid a net debt of 1.90 which is 76% of the 2.50 width.
TOS shows a 15.25 breakeven, max profit of 120 and 58% POP by Aug expiry.
IVR 71% with IV 29%
Profit target of + 20% the initial debt for +0.38 at 2.28. Sold two lots to make it worth my time.
SOLD -2 DIAGONAL USO 100 19 OCT 18/17 AUG 18 17/14.5 PUT @2.30