Home › Forums › Closed Trades › Vol Buy in AMZN
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Steven Place.
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July 31, 2016 at 6:57 pm #6609
Steven Place
KeymasterSetup: Vol Buy
Price: IV 20%
Description
So this is the first time AMZN hasn’t moved big on earnings in a while.
The chart above is the VIX for AMZN. It has crashed. This is the cheapest vol we’ll see in AMZN in a long time.
This trade looks complicated, but it’s basically a call buy with a put spread buy.
You could also consider it a strangle buy with a put sale to finance some of the cost.
IWO Premium Order Ticket Type Asset Duration Strike C/P BTO AMZN 16 Sep 16 780 Call BTO AMZN 16 Sep 16 720 Put STO AMZN 16 Sep 16 690 Put Total Debit: 18.6 -
This topic was modified 6 years, 10 months ago by
Steven Place.
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This topic was modified 6 years, 10 months ago by
Steven Place.
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This topic was modified 6 years, 9 months ago by
Steven Place. Reason: changed label of order
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You must be logged in to view attached files.August 1, 2016 at 10:24 am #6614Steven Place
KeymasterOk putting this trade on with half size:
IWO Premium Order Ticket Type Asset Duration Strike C/P BTO AMZN 16 Sep 16 780 Call BTO AMZN 16 Sep 16 720 Put STO AMZN 16 Sep 16 690 Put Total Debit: 19.00 If the value gets down to 17.00, I will add to the trade.
And if the value gets down under 7.00 I will stop out for a loss.
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This reply was modified 6 years, 9 months ago by
Steven Place. Reason: changed order label
August 12, 2016 at 2:58 pm #6730Steven Place
KeymasterOk I’m going to adjust this trade…
Instead of just straight up adding to the trade– which is a fine idea on its own and will still work out– I am going to move the long put to a higher strike.
There’s a couple things this will do to the trade. I’ll first show it to you on a risk graph, then give you the changes in the greeks.
So before:
And after:
So on a single spread, it cuts delta from 36 to 2.5, and it increases vega from 122 to 161.
Basically, this is getting the delta flat, increasing capital risk, significantly cutting downside risk.
I’m very comfortable adding risk here. AMZN 20 day historical vol is the lowest it’s been IN THE HISTORY OF THE STOCK.
It’s the same thing with the implied volatility as well. It’s stupid cheap and worth a buy.
So here’s the roll.. pretty simple, just move the 720 put up to the 770 put:
IWO Premium Order Ticket Type Asset Duration Strike C/P STC AMZN 16 Sep 16 720 Put BTO AMZN 16 Sep 16 770 Put Total Debit: 12.55 September 14, 2016 at 3:42 pm #6965Steven Place
KeymasterTaking the loss on this one, can’t afford to hold it into opex with the potential for the stock to pop.
IWO Premium Order Ticket Type Asset Duration Strike C/P STC AMZN 16 Sep 16 780 Call STC AMZN 16 Sep 16 770 Put Total Debit: 10.86 If you still have the 690 put still open, just close it for .01.
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