Buy to Open XLE Oct/Dec 65 Put Calendar @1.02
Add to the trade at 68. Guidance will follow if that level is hit.
UPDATE
Closing the trade for a loss.
Sell to Close XLE Oct/Dec 65 Put Calendar @0.81
-20% Return on Risk On Tier 1
Become a Great Options Trader
By Steven Place
By Steven Place
By Steven Place
WYNN is up 8% over the past 10 days…
and is up 12% over the past 20.
We’re seeing some overbought readings here, and I expect the stock to establish a new range as it heads into its earnings.
This is where it gets pretty interesting…
WYNN reports earnings on November 1st. That’s at least the expected report.
The option markets that are currently open are Oct and Dec.
That means the October options do not have earnings risk, and December does.
Normally, when you see this, the near term options will have a higher implied volatility than the far term.
Right now the Dec only has a 3 percentage point premium relative to October.
I expect, over the next month, for the October premium to get hit while the December stays bid. Combine that thesis along with the fact that sideways action is a good bet here… it makes sense to deploy income calendars.
Here’s the setup:
Buy to Open WYNN Oct/Dec 145 Put Calendar @3.60
This is a scaling trade. If WYNN runs above 151, we will add the 150 put calendar.
Target is 20% return on risk.
UPDATE 9-27-17: Taking Profits Here
Sell to Close WYNN Oct/Dec 145 Put Calendar @4.28
18.8% RoR
By Steven Place
Setup: Overbought
Price: 2160
Description: I think SPX will *eventually* come into 2200. However, if it happens in the near term then it’s a good fade.
The trade setup:
IncomeLab Order Ticket | ||||
Type | Asset | Duration | Strike | C/P |
---|---|---|---|---|
STO | SPX | Aug | 2220 | Call |
BTO | SPX | Aug | 2225 | Call |
Total Credit: | 0.7 |
Filled on a GTC at 0.70. Will add to trade at 1.20 and 1.70.
Will BTC at 0.30.
Taking Profits:
Full Time Profits Order Ticket | ||||
Type | Asset | Duration | Strike | C/P |
---|---|---|---|---|
BTC | SPX | Aug | 2220 | Call |
STC | SPX | Aug | 2225 | Call |
Total Debit: | 0.25 |
By Steven Place
The VIX is really low so the best income trade right now is a calendar.
Buy to Open SPX May/Jun 2070 Put Calendar @15.00
If/when SPX moves 40 points in either direction we’ll add another round of calendars.
If SPX continues to squeeze after that, then we will roll the losing calendar to new strikes.
I’m putting limit orders out at 18.00 just in case the vol structure changes quickly after the Fed minutes.
Ok I’m getting out of this trade here, it has decent profits but all it takes is 30 handles either way to lose it… and we’ve only got 2 weeks to opex so it would be difficult to recoup those gains.
Here’s the trade:
Sell to Close SPX Jun 2070 Put
Buy to Close SPX May 2070 Put
Credit: 17.20
15% RoR
By Steven Place
About 60 days to April expiration, time to put on another iron condor.
Where we sit on this trade… it’s sitting at a slight profit, but short directional exposure is starting to get accumulated.
Sure the market is overbought but it can stay overbought and continue to frustrate us even further.
Here’s the catch-22 that we’ve got right now.
As I type this there are only 37 days left to expiration. Because February was a short month, the time is actually going by a little faster than I had expected.
Our plan currently is to roll the call side higher and add to risk. Here’s the problem that I currently see.
The cost of this roll is a little higher than I’d like. What I mean by that is the premium savailable on further OTM calls are lower because everyone and their mother is selling SPX call premium.
This drives the amount of premium lower as well as the strikes we can select.
Right now the suggested roll is to take the 2050/2060 call spread and move it higher to the 2080/2090 call spread. At current mid prices you’ll be able to do this with no increase in margin.
Yet, the roll of 30 points higher just *feels* too tight. That’s the concern I have right now.
It will also double the short exposure we have in the market. That means we haev to be willing to take some upside heat. I’m comfortable doing that at these price levels but it’s still a concern. I remember the rally in Oct 2015 that ran me over and that’s one of the biggest concerns I have right now. We may have to deploy a hedge by purchasing some May SPX calls to reduce delta if we do start to squeeze above 2030.
Here is the trade adjustment:
Buy to close SPX Apr 2050/2060 call spread @2.80
Sell 2x Apr 2080/2090 call spread @1.40
Closing this out here:
BUY TO CLOSE SPX APR 2080/2090 CALL SPREAD @1.30
BUY TO CLOSE SPX APR 1770 PUT @0.05
Return Calculations:
Opened 10 put spreads for 1.10 Credit, closed for 0.05 -> $1050 profit
Opened 5 Call spreads for 1.60 credit, closed for 2.80 -> $600 loss
Opened 10 call spreads for 1.40 credit, closed at 1.30 -> $100 profit
Total Profit: 1050 – 600 + 100 = $550