OPENING: SVXY NOV 25TH 72/74 SHORT PUT VERTICAL
Updated
I did this one on Friday on the volatility pop we had, but didn't get a chance to post ... . I got it filled for an 87/contract credit, but could have done better were I to have had time to do some price discovery. SVXY isn't the most liquid thing in the world, so it pays to be patient and fiddle with getting a fill $5-$15 above the stated mid price.
Here, I'm looking for volatility to collapse going forward from these levels which, for SVXY, means that it will move upward with both the combination of VIX collapse and contango. If I'm unable to take profit at 50% max of the setup at expiry, I will roll it forward for duration and credit ... .
Notes: Variations on this play: look to sell an ATM short call vertical in either VIX, VXX, or UVXY, assuming that VIX remains at this level for a period of time (e.g., a VXX Nov 25th 33/36 short call vert; $93 credit at the mid; max loss/buying power effect: 207/contract).
Here, I'm looking for volatility to collapse going forward from these levels which, for SVXY, means that it will move upward with both the combination of VIX collapse and contango. If I'm unable to take profit at 50% max of the setup at expiry, I will roll it forward for duration and credit ... .
Notes: Variations on this play: look to sell an ATM short call vertical in either VIX, VXX, or UVXY, assuming that VIX remains at this level for a period of time (e.g., a VXX Nov 25th 33/36 short call vert; $93 credit at the mid; max loss/buying power effect: 207/contract).
Note
Rolling the 72 long put to the 70 for an additional 83/contract credit, realizing a gain of 77/contract, and moving my break even closer to current price (now at the 72 strike).Note
Covering today for an .84 ($84)/contract debit. Original setup credit of .87 plus roll for an .83 credit minus .84 debit to close minus fees/commissions = .80 net profit ($80)/contract -- more than I wanted out of the original setup ... .
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