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December 9, 2016 at 11:17 am
#7269
Steven Place
Keymaster
Quick update on this trade.
We’ve done a few things so far….
First, we added the upside call hedge to reduce directional exposure.
And then the market ripped higher.
So our next step was to close out the hedge for a profit and then use those profits to help pay for the cost to roll the call spread to the upside…
IncomeLab Order Ticket | |||||
Type | Size | Asset | Duration | Strike | C/P |
---|---|---|---|---|---|
BTC | Full Size | SPX | 6 JAN 16 | 2270 | Call |
STC | Full Size | SPX | 6 JAN 16 | 2280 | Call |
STO | Full Size | SPX | 6 JAN 16 | 2300 | Call |
BTO | Full Size | SPX | 6 JAN 16 | 2310 | Call |
Total Debit: | 1.8 |
IncomeLab Order Ticket | ||||
Type | Asset | Duration | Strike | C/P |
---|---|---|---|---|
STC | SPX | 13 JAN | 2290 | Call |
Total Credit: | 8.7 |
Now what we are going to do is add some put spread sales. This will generate additional credit to the trade to help gain more income. It will also cut down on how net short we are on the trade.
IncomeLab Order Ticket | ||||
Type | Asset | Duration | Strike | C/P |
---|---|---|---|---|
STO | SPX | 6 JAN | 2170 | Put |
BTO | SPX | 6 JAN | 2160 | Put |
Total Credit: | 1 |
We now have an iron condor where all the strikes have been shifted higher.