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Steven PlaceKeymaster
Ok so we’re going to do a cal-vert stairstep.
What that means is… we currently have on a bull call spread and we’re going to roll the long option up and out to convert it to a calendar.
This will basically iliminate all risk in the trade, cut our delta down, and give us an opportunity to stick around in the trade as we head into earnings.
So as it stands.
We entered the Oct 100 calls at a basis of 1.95
We sold half at 2.60
And then we sold the Oct 110 calls at 1.52
So we are going to SELL TO CLOSE the Oct 100 calls and BUY TO OPEN the Nov 110 calls.
That way we will have an Oct/Nov 110 call calendar.
To “roll” this trade, we will use a diagonal spread.
IWO Premium Order Ticket Type Asset Duration Strike C/P STC BABA 21 Oct 16 100 Call BTO BABA 18 Nov 16 110 Call Total Credit: 3.6 - This reply was modified 6 years, 8 months ago by Steven Place. Reason: changed ticker on order ticket
Steven PlaceKeymasterGoing to sell half here into 70.
IWO Premium Order Ticket Type Asset Duration Strike C/P STC TWLO 18 Nov 16 70 Call Total Credit: 6.20 Steven PlaceKeymasterGoing to take off this trade for a profit.
Full Time Profits Order Ticket Type Asset Duration Strike C/P BTC AAPL 21 Oct 16 115 Put STC AAPL 18 Nov 16 115 Put Total Credit: 2.25
Full Time Profits Order Ticket Type Asset Duration Strike C/P BTC AAPL 21 Oct 16 110 Put STC AAPL 18 Nov 16 110 Put Total Credit: 2.03 14% return on risk.
Now look– here’s the cool lesson I’ve been trying to teach on this trade.
Remember earlier how this trade looked like garbage on the analytics?
Here’s what it looks like now:
This is because the TERM STRUCTURE is changing because of earnings.
The October options are decaying more and the November options are decaying less than what the analytics were pricing in.
That’s because the November options continue to have TIME PREMIUM replaced by EVENT PREMIUM due to earnings.
Steven PlaceKeymasterOK so the stock broke support on the open but failed to see followthrough. I’m expecting this to run here.
IWO Premium Order Ticket Type Asset Duration Strike C/P BTO TWLO 18 Nov 16 70 Call Total Debit: 4.4 Close under 61 gets me out.
Steven PlaceKeymasterRest of the call spreads expired worthless.
Steven PlaceKeymasterTaking profits on the trade and waiting for reentry on a pullback.
Full Time Profits Order Ticket Type Asset Duration Strike C/P BTC TLT 21 Oct 16 130 Put STC TLT 21 Oct 16 127 Put Total Debit: 0.14 Steven PlaceKeymasterTaking profits on the trade and waiting for reentry on a pullback.
Full Time Profits Order Ticket Type Asset Duration Strike C/P BTC TLT 21 Oct 16 130 Put STC TLT 21 Oct 16 127 Put Total Debit: 0.14 Steven PlaceKeymasterRest of the puts expired worthless.
Steven PlaceKeymasterCalls expired worthless.
Steven PlaceKeymasterExpired.
-100% on capital.
Steven PlaceKeymasterTaking profits here:
IWO Premium Order Ticket Type Asset Duration Strike C/P BTC GLD 21 Oct 16 120 Put STC GLD 21 Oct 16 117 Put Total Debit: 0.06 Steven PlaceKeymasterRunner call expired worthless.
Steven PlaceKeymasterDefinitely let this one get away from me. While the overall market was weak, the stock ripped on good Macau numbers.
I’m going to bail here for a small loss and stalk it to the long side.
Because we have a combination of a bear put spread and a bull put spread, we’re going to use a put condor order to close the trade.
IWO Premium Order Ticket Type Asset Duration Strike C/P STC WYNN 21 Oct 16 95 Put BTC WYNN 21 Oct 16 90 Put BTC WYNN 21 Oct 16 80 Put STC WYNN 21 Oct 16 75 Put Total Debit: 1.11 Steven PlaceKeymasterThis expired worthless.
Initial entry at 1.60,
Spread half at 0.70
Net loss is 0.90
-56% return on risk
Steven PlaceKeymasterUsing this bounce and the amount of theta to close out this trade.
IWO Premium Order Ticket Type Asset Duration Strike C/P BTC VZ 21 Oct 16 49 Put STC VZ 21 Oct 16 46 Put Total Debit: 0.16 -
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