Big Lizard on FXE
Updated
With IV rank at over 46 on FXE, the expected move in 46 days is +/- 2.61 (Prices at 106.01-100.79). If I sell a Big lizard, my break even on the downside would be just below the expected move and we don't have risk to the upside (In case it wants to pull back to the 200 EMA).
Sold the 103 Straddle with upside protection buying the 105 call with 46 days to expiration on FXE.
The trade:
Short 103 Call
Short 103 Put
Long 105 Call
Credit $2.25
Break Even at 100.75
74% probability of profit
Sold the 103 Straddle with upside protection buying the 105 call with 46 days to expiration on FXE.
The trade:
Short 103 Call
Short 103 Put
Long 105 Call
Credit $2.25
Break Even at 100.75
74% probability of profit
Trade active
With IV Rank increasing and now on 84, almost double when it was when we originally put the trade on. We are down on the trade, but still far from our break even. But the high volatility give us a chance to increase our probabilities by adding a ratio spread and escentially transforming the trade into a Spike lizard.I am buying the the 101 Put and selling 2 of the 99 Puts for every one 101 (1:2 Ratio)
We are basically increasing our risk to the downside, but improving our chances. Now our break even is at 98.79 Giving us a new probability of profit of 83%.
Trade closed: target reached
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