OPENING: VIX AUG 16TH 9/12.5/12.5/16 IRON FLY
Going to bite on an August setup here ... .
Metrics:
Max Profit: $190/contract
Max Loss/Buying Power Effect: $160/contract
Break Evens: 10.40/14.40
Theta: .94
Delta: 17.02
Notes: Previously, the recommendation was to shoot for 25% max profit on these. If you do that, however, you'll have to wait until the very last moment, generally, so shooting for 10% max on these instead. It hardly seems worth the effort, but there isn't much to play in this market with the VIX at sub-12 levels. Naturally, if the front month future was higher up the ladder, the fly would be wider and probably pay more, making a 10% take profit more enticing.
Another minor thing of note: it still pays to put these on a "pop" even if it's not to 15. VIX implied volatility rises as its price increases, so you'll get some volatility contraction if price declines somewhat after you put these on.
Metrics:
Max Profit: $190/contract
Max Loss/Buying Power Effect: $160/contract
Break Evens: 10.40/14.40
Theta: .94
Delta: 17.02
Notes: Previously, the recommendation was to shoot for 25% max profit on these. If you do that, however, you'll have to wait until the very last moment, generally, so shooting for 10% max on these instead. It hardly seems worth the effort, but there isn't much to play in this market with the VIX at sub-12 levels. Naturally, if the front month future was higher up the ladder, the fly would be wider and probably pay more, making a 10% take profit more enticing.
Another minor thing of note: it still pays to put these on a "pop" even if it's not to 15. VIX implied volatility rises as its price increases, so you'll get some volatility contraction if price declines somewhat after you put these on.
Comment:
Weirdly enough, filled above the mid at 1.93 ... .
Trade closed: target reached:
Covering the 12.5/12.5/16 for a 1.75 db here. The 9 long put is no bid, so will just let it expire worthless.