OPENING: XOP Aug $42 big lizard
The strategy is essentially short the 42 straddle with a long 45 strike call to limit the upside risk.
The 'proft zone' 39.11-44.90 with almost no risk to the upside.
I plan to manage a winner early to collect around $70-75 ( 25% of the initial credit ).
Currently there's 46 days to expiry but I'd like to see this closed for profit before July is out.
For the downside risk, if the XOP pullback is dramatic enough, I'd take assignment at 42 with a reduced cost basis around 39.
I can then sell calls against the stock after to further reduce cost basis.
I closed for a win last week on July 20, keeping $75
BOT +1 1/-1/1 CUSTOM XOP 100 17 AUG 18/17 AUG 18/17 AUG 18 42/45/42 CALL/CALL/PUT @2.15