Opened (Margin): GLD May 19th 185/Sept 15th 210 LPD*
Updated
... for a 19.98 debit.
Comments: Taking a bearish assumption directional shot in GLD here on strength. Buying the back month -90 delta put and selling the front month +30 to emulate the delta metrics of a covered put (i.e., short a one lot of stock + short a put).
Cost basis of 19.98 with a 190.02 break even on a 25 wide. 5.02 (SGX:502) max profit, assuming a finish sub-185, 25.1% ROC at max; 12.6% at 50% max.
Will generally look to roll out the short put at 50% max to the shortest duration 30 delta strike that is at or below my break even. With the back month out in September, I have quite a few opportunities to reduce cost basis if the setup doesn't work out immediately.
* -- Long Put Diagonal.
Comments: Taking a bearish assumption directional shot in GLD here on strength. Buying the back month -90 delta put and selling the front month +30 to emulate the delta metrics of a covered put (i.e., short a one lot of stock + short a put).
Cost basis of 19.98 with a 190.02 break even on a 25 wide. 5.02 (SGX:502) max profit, assuming a finish sub-185, 25.1% ROC at max; 12.6% at 50% max.
Will generally look to roll out the short put at 50% max to the shortest duration 30 delta strike that is at or below my break even. With the back month out in September, I have quite a few opportunities to reduce cost basis if the setup doesn't work out immediately.
* -- Long Put Diagonal.
Trade closed manually
Money, take, run ... . Closed for a 21.30 credit. 1.32 (1132) profit. 6.6% ROC in <24 hours. I'll take that every time ... .Disclaimer
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