... for a 2.44/contract credit. Metrics: Max Loss/Buying Power Effect: Undefined/6.94 Max Profit: 2.44 Break Evens: 31.56/36.44 Theta: 3.89 Delta: -14.41 Notes: Going where the volatility is at (again) in exchange-traded funds to sell a little August cycle premium while I wait for the September monthly to be more in that 45 days until expiration sweet spot. ...
... for a 1.34/contract debit. Metrics: Probability of Profit: 56% Max Loss: $134/contract Max Profit: $66/contract Break Even: 38.66 Notes: Adding a smidge of short vol product here ... .
... for a 2.97/contract credit. Metrics: Max Loss/Buying Power Effect: Undefined/~$670/contract Max Profit: $297/contract Break Evens: 32.03/37.97 Theta: 3.15 Delta: 30.73 (Neutral to Bullish) Notes: Here, I'm looking to emulate the delta of a naked 30 delta short put (paying ~.70/contract currently), but bringing in the beefier credit and extrinsic value of a...
... for a 7.61/contract credit. Metrics: Max Loss/Buying Power Effect: Undefined/~$909/contract Max Profit: $761/contract Break Evens: 40.39/55.61 Theta: 8.64 Delta: 24.9 (Neutral to Bullish) Notes: Another trade attempting to emulate a ~30 delta short put, while bringing in the greater extrinsic of a short straddle. Will take profit at the lesser of 10% of...
Banks have sold off here and I believe if the market can start to move again, financials will recover. I structured a Super bull for this trade. Trade: In chart. Overall, $.46 credit on the trade. Current risk: $454 Current R/R: 10.2% ROC (likely to increase if I can capture profits in the call spread.
We're back into the thick of earnings season again ... . NFLX (rank 64/implied 52) pops the top on Monday after market close, so you're going to want to slap anything you want to do on before session end to take maximum advantage of a volatility contraction play. Pictured here is a 20 delta iron condor in the weekly with a buying power effect of 6.59 per...
Another covered short "combo" setup (see Post Below) with the delta metrics of a covered put sans the buying power effect of short stock and plenty of time to work out and/or reduce cost basis ... . Metrics: Max Loss/Buying Power Effect: Undefined/~$1234 Max Profit: $514/contract (realized on finish below the short put) Break Evens: 46.14/no downside risk Delta:...
... for a 29.39/debit per one lot. Metrics: Max Loss: 29.39 per contract on setup Max Profit: 1.61 per contract on setup (5.48% ROC) Break Even: 29.39 on setup Delta: 37.54 Theta: 1.40 Notes: Roll the short call out on significant loss of value,* to maintain the desired net delta of the position, and/or to defend the break even. I would note a couple of...
A "combo" is a two-legged option setup with a "long combo" consisting of a short put and long call sold at the same strike and in the same expiry, and a "short combo" consisting of the inverse -- a short call and a long put sold at the same strike. The short combo emulates a short stock position with static* -100 delta; a long, a long stock position with +100...
On occasion, I like to take small directional shots without hanging myself too far out there from a buying power perspective because I lack directional conviction or (more often), I'm working a small account where going full on covered call just isn't an option due to buying power effect. FXI has come quite far off off highs and doesn't appear hugely inclined to...
... for a 1.89/contract debit. Metrics: Max Loss on Setup: $189/contract Max Profit on Setup: $61/contract Break Even: 14.89 versus 14.93 spot Debit Paid/Spread Width Ratio: 75.6% Notes: Taking a directional shot on SLV weakness here. Will look to take profit at 20% of what I put the trade on for ... .
... for a 2.36/contract credit. Metrics: Probability of Profit: 55% Max Profit: $236/contact Max Loss/Buying Power Effect On Margin: Undefined/$525/contract Break Evens: 23.64/28.36 Delta: -9.37 Theta: 2.1 Notes: Did this from my phone on Friday ... . Although I like to see >35% background implied volatility when pulling the trigger on these, at 30.3%, this...
While I'm waiting for my August monthly premium selling plays to grind out, I'm pounding the pavement for potential directional plays to get in on. Late last week, I shorted TLT at the 122 horizontal resistance level I alerted last week via the inverse TBT, (See TBT Upward Call Diagonal Post Below), so I'm looking for fun in other places, one of which is in USO,...
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 2.62/contract debit. Metrics: Max Profit on Setup: $138/contract Max Loss on Setup: $262/contract Break Even: 35.62 vs. 35.69 spot Debit Paid/Spread Width Ratio: 65.5% Notes: Basically, shorting treasury strength with the inverse instrument ... . Here, I'll look to take profit somewhat quickly, since I've only got one roll opportunity with this setup....
Short on strength/horizontal resistance ... . Metrics: Max Profit on Setup: $208/contract Max Loss on Setup: $489/contract Break Even: 122.08 vs. 122.11 spot Debit Paid to Spread Width Ratio: 489/700 = 69.9% Notes: This assumes that this level (122) sticks around or is available at NY open. Ideal profit would be ~20% of what you put it on for (.20 x 4.89 =...
... for a 1.40/contract debit. Metrics: Probability of Profit: 61% Max Profit: $60/contract Max Loss: $140/contract Break Even: 39.60 Notes: Putting on a smidge of short volatility here in VXX on this pop ... .
BAC is offering up a nice R:R to the upside. I have an alarm set above this recent consolidation. If we can break above that on the 130m chart and stay above, I'll try to use the R:R setup that I have in the screen shot. Pick your targets (aligned on the right-hand side) based on what you like to look for in trade returns.