TRADE IDEA: VXX FEB 19TH 27/29 LONG PUT VERTICAL
Since there's no February 2nd weekly available for me to use, I'm going out to the monthly to put on my weekly short volatility product play.
Here, I'm going narrower with the spread, but doubling the number of contracts to show how to scale trade size with both width of the spread and the number of contracts.
As compared to the 3-wides, which I normally get filled for around 2.25/contract and that have a max profit potential of .75/contract (33% ROC), I'm shooting for a 1.34/contract fill for the two-wides and a .66/contract max profit potential (49.25% ROC). Since I'm using two contracts instead of one, max loss is 2.68 per 2x2 as compared to the 2.25 for the 1x3, but max profit is 1.32 versus .75.
Here, I'm going narrower with the spread, but doubling the number of contracts to show how to scale trade size with both width of the spread and the number of contracts.
As compared to the 3-wides, which I normally get filled for around 2.25/contract and that have a max profit potential of .75/contract (33% ROC), I'm shooting for a 1.34/contract fill for the two-wides and a .66/contract max profit potential (49.25% ROC). Since I'm using two contracts instead of one, max loss is 2.68 per 2x2 as compared to the 2.25 for the 1x3, but max profit is 1.32 versus .75.
Comment:
Wasn't going to get filled for the "ideal" one-third the width of the spread (1.34); filed for a 1.40/contract db (2.80/2x2).
Comment:
Well, were I to have been a little more patient, would have got that ideal one-third fill, looks like, on this little dip we're experiencing here ... . Lol.
Trade closed manually:
Taking off a little risk here: covering here for a 1.42/contract credit (basically, a scratch). Still have the Feb 2nd 27.5/30.5's, the Feb 9th 27/30's, the Feb 16th 28/31's (as well as a long-dated short VIX setup).