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Opening (IRA): BITO April 19th 26 Short Put... for a 1.23 credit. Comments: Adding to my covered call position (See Post Below) on weakness, converting the covered call into a covered strangle (i.e., short put + stock + short call). I went with April, since May appeared to be shit illiquid at where I'd want to pitch my tent. I'm fine with being assigned additional stock here at the 26 strike, since my cost basis in my shares is currently 27.54, with the cost basis in any shares assigned via the 26 at 24.77, although my preference would be just to take profit on the covered call aspect at 50% max and the short put at 50% max and move on. Naturally, if I also manage to grab the April dividend, that would be additionally bueno. As a standalone trade: Break Even/Buying Power Effect/Cost Basis in Any Assigned Shares: 24.77 Max Profit: 1.23 ($123) ROC at Max: 4.97% ROC at 50% Max: 2.48%
AMEX:BITOLong
by NaughtyPines
GBPUSD: Exploring a High Reward Sell OpportunityCurrently, the Institutional Order Flow on GBPUSD remains bearish , indicating a continued pursuit of premium trading points such as the H1 Bearish Order Block . Smart Money is likely to engage in selling at these levels to capitalize on price movement towards discount prices. My anticipation revolves around the mitigation of the H1 Bearish Order Block, representing Smart Money's final institutional buying within the market . Upon confirmation, I'll seek an entry to target the Daily Bullish Order Block, serving as my Draw On Liquidity. Additionally, there's a H1 Liquidity Void that I expect the market to fill before considering any selling actions. I remain adaptive to market dynamics and will adjust my approach accordingly. Kind Regards, The_Architect
Short
by The_Archi-tect
Opened: SMH March 15th 169/175/199/205 Iron Condor... for a 2.07 credit. Comments: 30-day IV at 27.8%. (Higher would be better, but you can't have everything). Collecting 1/3rd of the width of the wings in credit. 2.07 credit on BPE of 3.93; 52.7% ROC at max; 26.3% at 50% max. As usual, will generally look to take profit at 50% max; adjust sides on side test. This is probably my last trade in the March monthly, since 45 DTE is kind of the wheelhouse for this stuff, and the March monthly is at 43 DTE. I'll mostly hand sit from here until month end, with most of the trades being adjustments.
NASDAQ:SMH
by NaughtyPines
2
Opening: NFLX 435/445/545/555 Iron Condor... for a 3.45 credit. Comments: Earnings play with the announcement today after close. 3.45 credit on buying power of 6.55; 52.6% ROC at max; 26.3% at 50% max. I'm basically looking for two things here: (1) IV contraction post-earnings; and (2) price to stay within the expected move, which the options market is pricing in to be about +/- 43 handles from current price (i.e., 448 to the downside, 534 to the up). And ... we'll see how that goes.
NASDAQ:NFLX
by NaughtyPines
Opening (IRA): XBI March 15th 84 Monied Covered Call... for an 81.63 debit. Comments: 32.1% 30-Day IV. My general preference for ETF IV is >35%, but there isn't much currently there in my ETF screener, and I'm already in a GDX position: TQQQ (52.3%); USO (38.1%); GDXJ (35.0%). Buying a one lot and selling the -75 delta call against to emulate a 25 delta short put with "built-in" defense of the position via the short call. 2.37 max on BPE of 81.63; 2.90% ROC at max; 1.45% at 50% max.
AMEX:XBILong
by NaughtyPines
Opened: KRE March 15th 39/44/50/55 Iron Condor... for a 1.68 credit. Comments: ETF IV > 35% with 30-day IV at 37.9%. Collecting 1/3rd the width of the wings of a 5-wide; 1.68 credit on BPE of 3.32; 50.6% ROC at max; 25.3% at 50% max. It was kind of a toss-up between doing this as an iron fly or as an iron condor due to the size of the underlying, so compromised, going in somewhat aggressively with the short option legs (they're camped out at the 30 delta). This will allow me to adjust the setup somewhat before having to go inverted with the short strangle aspect (now I've jinxed it). Will generally look to take profit at 50% max; adjust sides on side test.
AMEX:KRE
by NaughtyPines
Opening: TSLA Feb 16th 180/190/230/240 Iron Condor... for a 3.55 credit. Comments: Earnings announcement volatility contraction play. I ordinarily put these on right before earnings, but will probably space it out, so am putting it on today. Earnings will be announced on Wednesday, 1/24, after market close. Here, selling the 25 delta short option strikes and buying longs 10 strikes out from the shorts, resulting in 10 wide wings on which I've collected more than 1/3rd the width of the wings in credit, as well as a net delta setup that's about as delta neutral as you can get. I'm using the next available monthly here so that I've got a little time to manage the setup in the event that that the move is bigger than the options market is anticipating here (around +/- 19 handles, which would be around 225 on the call side, 190 on the put, given current price). The basic notion here is that (a) TSLA IV contracts post-earnings; and (b) it stays within the expected move. The Metrics: 3.55 credit on buying power effect of 6.45; 55.04% ROC at max; 27.52% at 50% max; delta/theta 1.00/8.02; 186.45/233.55 break evens. Since this is a defined risk setup, the BPE is the same regardless of whether you set it up in cash secured account like an IRA or on margin.
NASDAQ:TSLA
by NaughtyPines