{"id":8293,"date":"2017-07-26T11:14:21","date_gmt":"2017-07-26T15:14:21","guid":{"rendered":"https:\/\/trades.iwopremium.com\/?p=8293"},"modified":"2017-07-26T11:14:21","modified_gmt":"2017-07-26T15:14:21","slug":"update-to-ba-trade","status":"publish","type":"post","link":"https:\/\/trades.iwopremium.com\/update-to-ba-trade\/","title":{"rendered":"Update to BA Trade"},"content":{"rendered":"

Here was the original trade in BA:<\/p>\n

Sell to Open BA Aug 210\/220 Call Spread<\/p>\n

Tier 1: Enter at 1.80, Close at 0.80<\/p>\n

Tier 2: Enter at 2.40, Close at 1.80<\/p>\n

Tier 3: Enter at 3.00, Close at 2.40<\/p><\/blockquote>\n

BA has since rallied and overtaken the call spread on earnings:<\/p>\n

\"\"<\/p>\n

As it stands right now, the trade is nearing full loss.<\/p>\n

We are going to work back some of the losses, but first I want to warn you…<\/p>\n

Don’t try to revenge trade this. We’re not looking to get this back to a winner. That means you don’t add any more spreads, and you don’t try to go “all in” at once.<\/p>\n

Odds are this stock will continue higher for the next few days and then go sideways for a while.<\/p>\n

So let’s talk about what we’re working with.<\/p>\n

The current spread value is sitting at 9.20.<\/p>\n

That means tier 1 is down 740, tier 2 is down 680, and tier 3 is down 620.<\/p>\n

On average, it’s a per-spread loss of 680.<\/p>\n

What we are going to do now is close out the trade, sell put spreads, and scale into some call spreads.<\/p>\n

BA Trade Adjustment<\/h2>\n

Buy to Close BA Aug 210\/220 Call Spread @9.20<\/p>\n

Put Spread Sales<\/strong><\/p>\n

Sell to Open Full Size BA Sep 210\/200 Put Spread @0.70<\/p>\n

Buy to Close BA Sep 210\/200 Put Spread @0.20<\/p>\n

Call Spread Sales<\/strong><\/p>\n

Sell to Open BA Sep 240\/250 Call Spread<\/p>\n

Tier 1: Enter at 1.30, Close at 0.80<\/p>\n

Tier 2: Enter at 2.00, Close at 1.30<\/p>\n

Tier 3: Enter at 2.50, Close at 2.00<\/p>\n

Notice how we aren’t trying to recoup our losses by going “all in” on the short side again. We’re still using a scaling protocol.<\/p>\n

Now if everything goes according to plan, we’ll capture 0.50 of premium from the put side, then an average of 0.56 from the call spread side. That’s a net of about 1.00, which reduces our loss to 5.80. From there we’ll look at something in October if the trade setup is there.<\/p>\n","protected":false},"excerpt":{"rendered":"

Here was the original trade in BA: Sell to Open BA Aug 210\/220 Call Spread Tier 1: Enter at 1.80, Close at 0.80 Tier 2: Enter at 2.40, Close at 1.80 Tier 3: Enter at 3.00, Close at 2.40 BA has since rallied and overtaken the call spread on earnings: As it stands right now, […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_bbp_topic_count":0,"_bbp_reply_count":0,"_bbp_total_topic_count":0,"_bbp_total_reply_count":0,"_bbp_voice_count":0,"_bbp_anonymous_reply_count":0,"_bbp_topic_count_hidden":0,"_bbp_reply_count_hidden":0,"_bbp_forum_subforum_count":0,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":""},"categories":[24],"tags":[],"_links":{"self":[{"href":"https:\/\/trades.iwopremium.com\/wp-json\/wp\/v2\/posts\/8293"}],"collection":[{"href":"https:\/\/trades.iwopremium.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/trades.iwopremium.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/trades.iwopremium.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/trades.iwopremium.com\/wp-json\/wp\/v2\/comments?post=8293"}],"version-history":[{"count":1,"href":"https:\/\/trades.iwopremium.com\/wp-json\/wp\/v2\/posts\/8293\/revisions"}],"predecessor-version":[{"id":8295,"href":"https:\/\/trades.iwopremium.com\/wp-json\/wp\/v2\/posts\/8293\/revisions\/8295"}],"wp:attachment":[{"href":"https:\/\/trades.iwopremium.com\/wp-json\/wp\/v2\/media?parent=8293"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/trades.iwopremium.com\/wp-json\/wp\/v2\/categories?post=8293"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/trades.iwopremium.com\/wp-json\/wp\/v2\/tags?post=8293"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}