NaughtyPines

XHB PREMIUM SELLING PLAY

AMEX:XHB   SPDR S&P HOMEBUILDERS ETF
As I continue to look for premium selling plays other than earnings plays, XHB's IVR             (currently 71) looks modestly favorable for a premium selling play:

This is the play I filled around market open for a .47 credit ... . (Sorry I didn't note any of the stats at the time ... ).

Nov 6th 29/31/36/38 Iron Condor


michalf PRO
a year ago
CAN YOU EXPLAIN?" Nov 6th 29/31/36/38 Iron Condor"..
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NaughtyPines michalf
a year ago
Sorry, I was in a bit of a rush with the post ... . Basically, you would sell the following options with the November 6th expiry: a long put with the 29 strike, a short put with the 31 strike, a short call with the 36 strike, and a long put with the 38 strike. Most options brokers allow you to set this up as a single trade, so that you don't have to enter each leg individually ... . Unfortunately, the volatility has already ebbed out of XHB at this point, such that this might no longer be a decent trade (IVR has decreased from 71 when I put on the trade to 53).
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NaughtyPines
a year ago
Sometimes these plays involve a long story, but they're helpful to go through, since you can see how I manage trades when they don't work out immediately. Originally, I put on the above-referenced iron condor for a .47 credit/contract. I went with 3 contracts, so got a total of 1.51 credit for the play. When the put side neared worthless, I covered it for a .15 debit. With the call side breached, I anticipated rolling out the call side, and so set up an oppositional put side later out in time to match with the call side I was anticipating rolling out for additional time. With three days left until expiration (and after I had already set up the oppositional put side farther out in time), price dropped below the short call strike, and I covered the short call side with 1 DTE for a .69 debit. I would have been up at that point in time were I not to have set up the oppositional put side in anticipation of the roll (1.51 - .15 - .69 = .67 or $67) (yeesh). I hope to take off that short put side that I set up in anticipation of rolling out the call side for 50% max profit ... .
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