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New Income Trade in PCLN

Home › Forums › Income Trades › New Income Trade in PCLN

  • This topic has 1 reply, 1 voice, and was last updated 9 years, 4 months ago by Steven Place.
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  • December 30, 2013 at 1:22 pm #2213
    Steven Place
    Keymaster

    PCLN has been in a super tight range, and just expanded out of that range, hitting it’s lower 2nd standard deviation bollinger band.

    pcln-chart

    What’s more important here is the very large difference between the current volatility in the stock and what you get with the options market.

    pcln

    So I think a good trade here is to go into some PCLN iron butterflies in small size, with the intent to add and roll along the way.

    Here’s the trade I like:

    pcln-risk

    Adjustment points at 1110 and 1210.

     

    January 13, 2014 at 11:11 am #2214
    Steven Place
    Keymaster

    Going to float orders out to close the iron butterfly at 45.50. It’s right at a 20% return on risk and the stock looks ready to see a decent-sized move again.

    If we get another big move in PCLN I’ll look to reenter a similar trade.

    pcln-aftert

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