Friday, November 4th, 2016

September Trade update

Closed  call side of RUT IRON CONDOR. RUT is down 16.31 today. Now the risk is on the downside.

BUY RUT 810 SEPT CALLS SELL RUT 820 SEPT CALLS NET DEBIT= 0.15      Net profit =0.40                    

Yield =0.4/5= 8 %

Initial Trade :

SELL RUT 810 SEPT CALLS BUY RUT 820 SEPT CALLS    NET CREDIT= $0.55            

Iron Condor total margin = 10 /2     Call side Margin= 5

2. Closed POT speculative trade. POT is trading in range bound fashion. Hence we enacted a BUTTERFLY WITHOUT wings to gain maximum time decay. POT is trading now at 176.50 moved in and took profits. This would work as long as POT was between 170-180 rangebound. This an example of delta neutral trading. But you have to know your stock well enough and its Technical Analysis that goes with it.                      

BUY BACK SEPTEMBER 175 PUTS  =$ 8.70 

BUYBACK SEPTEMBER 175 CALLS= $ 10.80 

NET DEBIT=$ 19.50 

NET PROFIT= 21.20-$19.50  = $1.7

Yield = 1.7/14.2= 12%  

Initial trade :

SELL POT SEPTEMBER 175 PUTS  =$10.40  

SELL POT SEPTEMBER 175 CALL=  $10.80                  

Net credit= $21.20            Margin $14.2

Comments

5 Responses to “September Trade update”
  1. Those RUT’s should do well, wise decision to close the POT trade.

  2. alliance says:

    POT is a wild stock, But when stocks trade in a range time decay can be extracted. This kind of trade is not for everyone since you are selling both options naked. That is why its a speculative trade where the outcome is bit risky.

  3. I am researching views on strategies for the home-based investor. Your site helps to understand how strategies work. Is it a good idea for the non-pro to go beyond simply buying calls and puts? Do the trading platforms even allow non-trivial strategies at all for this kind of investor?

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