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Doubledouble

Opening (Small Account): IWM November 19th 198/204/2 x 246/249... "Double Double" Iron Condor for a 1.08 credit. Comments: If IWM is going to give me rangebound, I'm going to play it rangebound. Here, a "double double" iron condor to accommodate call side skew. To do this, I went 6 wide on the put side, but 3 wide on the call side with the short call legs at around 1/2 the delta of the short put leg, but double the number of contracts. (Double the number of contracts on the call side, double the width of the call side spread on the put side; hence, "Double Double."). This results in a delta neutral setup with spreads on both the put and call side that are fairly equidistant from where price is current trading and wide of the range IWM has been hanging out for the past several eons. Additionally, you're not tying up additional buying power by doing things this way, since a 2 x 3 ties up the same buying power as a 1 x 6. 22.0% ROC as a functional of buying power effect at max; 11.0% at 50% max.
AMEX:IWM
by NaughtyPines
1
Old Nuggets: Defined Risk Skew AccommodationSkew. It can be a pain in the butt if you want to trade both delta neutral and probability neutral. In QQQ, a delta neutral setup at the moment would be: selling a spread on the put side with the short put leg at the 275 (17 delta) and on the call side with the short call leg at the 344 (17 delta). However, this results in a short put strike 38 strikes away from current price and a short call strike 31 strikes away. It's delta neutral, but the probability of profit on the put side is 83% and on the call side 78%, so it isn't both delta neutral and probability neutral. Ugh. Fortunately, there is a solution to obtain both a delta neutral and a probability neutral setup, and it's with a variation on the iron condor: a "double double" -- double the contracts on the call side, with the put side being double the width of the call side spread. Because the risk associated with the put side spread -- that attributable to a five wide -- is greater than the risk associated with the call side (2 x 2 or the equivalent of a four wide), the maximum risk of the setup is that of a five wide -- the widest wing of the setup. In other words, doubling up the number of contracts on the call side doesn't increase buying power effect, because it's attributable to the widest wing (i.e., 5 > 2 x 2, so buying power effect is that attributable to the five wide). Here, you can't quite go exactly double due to strike availability at the moment on the put side (there's only five wides there), but you can go five wide on the put side, and 2 times a two wide on the call (the functional equivalent of a four wide) to get both a net delta and probability neutral setup: Put Side Short Put Leg: 17 delta Put Side Probability of Profit: 83% Call Side Short Call Leg: 2 x 12 delta Call Side Probability of Profit: 82% Resulting Setup Delta: .07 Naturally, skew isn't always to the put side; it's sometimes on the call side, where we'd do the opposite to accommodate skew: double up the number of contracts on the put side (but at half the spread width of the call).
NASDAQ:QQQEducation
by NaughtyPines
6
OPENING: IWM APRIL 17TH "DOUBLE DOUBLE" 136/146/2X172/2X177... for a 1.79 credit. Notes: Here, going defined in one of the smaller accounts with a "double double" iron condor. The call side short aspect is at half the delta of the put side short aspect, with the call side spread half the width, but doubled in contracts to accommodate skew. I'm not collecting one-third, but want to avoid potential whipsaw in this high volatility environment. The naked ratio'd 146/2x 172 is paying 2.85 for those not wanting to give up premium to the wings.
AMEX:IWM
by NaughtyPines
US Equities Double-Double Top: Correction ImminentSimple chart, two double tops in July, September. Index repeatedly rejected from 3020 level. Divergence in other indices- Dow, NQ, RUT all below their ATHs. We got a right shoulder forming from Apr > Jul > Sep. May was an ABC, August a meat-grinding see-saw; IMO October will be a vertical drop to double bottom. I do expect ONE more rally attempt before throwover, these waves seem to proc in 3's, look back at the waves in May and July, see there were 3 tiny micropeaks on each top, each micropeak was a bit smaller than the previous. At time of this writing futures are modestly bullish and point to a higher open from Friday's mini-panic selloff. This is to be expected and represents an opportunity to close longs and add to shorts. Multiple Bearish signals in candlesticks and technical rejection breakdown point lower. In May the top lasted from ~first peak April 23 to 3 May, and produced three top-off microrallies on 23rd, 30 and 3 May. This formed a left shoulder, first ATH and was followed by the A-B-C textbook correction. in July we see the exact pattern reproduced from 12 - 30 July; a second, higher ATH, a taller peak, again with three micropeaks on the plateau, followed by Bloody August meatgrind. Apr/May triple peak top: ~12 days; July: ~18 days; a little taller and it lasted a bit longer to form the Head, the most Bullish part of the formation. The August correction from July Head peak was a deep grind, rather than a vertical plummet, and lasted a full month. It was a rough ride for Bulls and Bears alike, we all took a beating getting whipsawed. In a previous idea I observed it could have broken either way, finally the Bulls took charge and broke it up. September has produced the Right Shoulder peak beginning on 11th with a 12 Sep microtop at 3020 and on 9-19, a second rally attempt attaining the same price on SP500, but lower prices on Dow 30, RUT, NQ and divergence in Transports. The brief love affair flirting with small caps seems to have ended, as IWM sank precipitously in late session. First the pumptards were taking funds out of FAANGs to pump up RUT, but now they're just taking funds out. Expect a third and final micropump to a slightly lower peak on 9/20 and/or 9/24; The bottom might be expected to fall out sooner than it did on the left shoulder, as right sides of H&S have lower volume, fewer buyers, less bull power and briefer duration. Right shoulders tend to be more pointy and spike down hard when the buyers fail to pump up the prices. No new money is coming in now, only algos are moving funds and rotating them through sectors to churn profits on nickel and dime spreads. This will be a 'bottomless drop' IMO. This final topping wave should last between 9-13 days; of which 23 Sep is session day 10. The wave completion Bear confirmation signal will be rejection from the third micropeak rally attempt. Expect an initial selloff to neckline followed by a retracement rally to provoke a principal Bearish reaction. Cycle evolution ~3-5 weeks. A double bottom to or below Dec lows would be a strong buy signal for the next and possible final primary Fifth wave to ultimate ATH.
TVC:SPXShort
by DaddySawbucks
12
Cashflow play on Nasdaq (Double Double)I am betting the market will be ranging and we can get a quick win by next week. The trade is like an iron condor, but with 2x the Calls vs the puts taking advantage of the skew and giving us more space to the downside. Our break evens are far away from the expected move at 5969.20 and 5648.1. This gives us a high chance of making money about 80% of the times. The trade (double double): 6 DTE +1 5630 Put -1 5650 Put -2 5970 Call +2 5980 Call Got filled for $2.13 Max profit is $213 Max loss is $1,787 That is a 80% probability to make 11% Return in 6 days.
TVC:NDQ
by AlexanderGotay
1
OPENING: IWM JUNE 16TH 128/131/141/142 "DOUBLE DOUBLE"This is basically an iron condor variation where you double up the number of contracts on the call side while going narrower with the call side spread. Due to "the math" of that, there is no additional buying power effect, but you collect some additional credit ... . Metrics: Probability of Profit: 57% Max Profit: $76/contract Max Loss/Buying Power Effect: $224/contract Theta: 1.59 Delta: -.68 Notes: Will look to take off at 50% max.
AMEX:IWM
by NaughtyPines