... for a 56.60 debit.
Comments: Since my previous double diagonal in IWM was such a hoot (See Post Below), re-upping here. Buying the back month 90 delta strikes (both call and put) and selling the front expiry 30 deltas, with the result being a delta neutral setup on fill.
As before, I tend to manage each side individually, so keep track of both my global...
... for a 57.79 debit.
Comments: Doing something a little funky here -- a double diagonal.
The best way to look at this setup is by breaking it down into two aspects: (a) a long call diagonal, with the back month at the +90 delta strike, the front at the -30; and (b) a long put diagonal, with the back month at the -90 delta strike, the front at the -30.
I...
... for a 1.22/contract credit.
Doing a smidge of defined risk, all-weather, broad market instrumentation here ... .
The metrics aren't much to look at, because they aren't static,* but here they are:
Max Loss/Buying Power Effect on Setup: $378/contract
Max Profit on Setup: $122
Delta: 3.48
Theta: 1.9
As far as intratrade management is concerned: Look to roll...
... for a 1.92 per contract credit.
Metrics:
Max Loss on Setup: $308
Max Profit on Setup: $192
Delta: .98
Theta: 2.50
Notes: Another double diagonal, this time in the routinely high implied volatility XOP (currently 35.5%), a la the EEM double diagonal I put on earlier in the trading session. (See Post Below). I've gone shorter duration in the back month...
... for a 1.38/contract credit.
Metrics:
Rank/Implied: 68/29
Max Profit on Setup: 1.38/contract
Max Loss/Buying Power Effect on Setup: 2.62/contract
Delta: -9.51
Theta: 2.06
Notes: I've done a few of these before. The way I look at them is that they offer the flexibility of a naked, while keeping your risk defined. An additional small benefit is that you...
This is a continuation of a trade started out as a double diagonal.
I've made various adjustments to the short straddle body and to the long strangle "shell" to demonstrate how to manage these trades. (See Previous Post).
Currently, it has a scratch point of 2.27, and I've got an order to take it off at 1.47, since I was shooting to originally get...
... for a .77/contract credit.
Truth be told, I kind of hate USO, with XOP being my go-to for petro-based plays. That being said, with its high implied volatility rank (65) and its decent background volatility (31%), I figured I'd throw a "can't hurt much" trade on here as a demo trade for a "safety tape" setup.
The basic notion of a "safety tape" trade is to...
... for an .83/contract credit.
Notes: I seem to be on a double diagonal kick of late ... . Will look to take profit at 20% of the width of the wings/roll the short straddle aspect at 25% max or at 21-25 DTE.
This a continuation of a trade that started as a put side net credit diagonal. With the underlying chopping along nicely in a fairly tight range, I figured I'd add a short call aspect to beef up the credit received on roll, increase theta, as well as to smooth out/neutralize the delta in the setup. For lack of a better label, it's basically a "Calendarized Iron...
... for a .58/contract credit.
Basically, this is a calendarized iron condor or iron fly, where you roll just the short strangle/short straddle body of the setup for cost basis reduction, while keeping the long strangle aspect in place for purposes of defining the risk ... . Take profit is somewhat subjective, but I start to look to bail on the trade at >20% of...
Diagonals are considered a low volatility strategy that look for volatility expansion going forward, and with VIX finishing the week in sub-10 territory, there probably isn't a better time to put one on. Here the legs of the setup are around the 20 delta strike, although a variation is to go for a small net credit where the credit received for the short options...
