Get started

Reversejadelizard

OPENING: GDXJ AUGUST 21ST 40/41/60 REVERSE JADE LIZARD... for a 1.06/contract credit. Metrics: Max Profit: $106/contract Max Loss: Undefined Break Even: No Put Side Risk/61.06 Delta/Theta: -14.82/2.72 Notes: High rank/implied at 41/59. I don't do these very often, but think downside risk is greater than upside, particularly due to call side skew (i.e., both shorts are set up at the 20 delta, but the put side is closer in price relative where the underlying is trading than the call side). The basic notion behind the setup: total credit received exceeds the max loss metric of the short put vertical. Since short put vertical side is a one-wide, it has a standalone max loss metric of 1.00. The credit received exceeds that by .06, so even if GDXJ blows through 40, I'll still make money/not lose money if I do nothing, although I can certainly roll down the short call side to attempt to get something out of the play if it comes to that. A defined risk counterpart of the same play would be something like the August 21st 41/42/55/60, put on for 1.00 or greater.
AMEX:GDXJ
by NaughtyPines
2
TRADE IDEA: GLD AUG 16TH 125/126/132/135 SYNTH REV JADE LIZARDMetrics: Max Profit: $124/contract Max Loss/Buying Power Effect: $176/contract Break Evens: $133.24 (No Downside Risk) Delta/Theta: -10.46/.22 Notes: A Jade Lizard is ordinarily a short put plus a short call vertical where the total credits collected exceeds the risk attributable to the short call vertical, making it a no upside risk setup. A Reverse Jade Lizard is the inverse of that -- a short call plus a short put vertical where the total credits collected exceeds the risk attributable to the short put vertical, making it a no downside risk setup. In this particular case, you would be going defined risk, but be collecting more in credit than attributable to the risk associated with the short put vertical which is a one-wide with 1.00 of max risk, so it's a no downside risk setup. As with an iron condor or short strangle, an ideal finish is between your short strikes (126 on the put side, 132 on the call), but you'll also realize profit anywhere below 133.24 and even if the underlying retraces dramatically and blows through your short side. Naturally, strikes may have to be tweaked, depending on what /GC does between now and New York open.
AMEX:GLD
by NaughtyPines
TWO EWY (S. KOREA ETF) TRADE IDEASI haven't traded this particular instrument before. For obvious reasons, now seems like a perfect time. The first of the two trades is a short strangle, with the shorts set up at the ~30 delta strike: JUNE 16TH 60/65 SHORT STRANGLE POP%: 59% Max Profit: $140/contract Max Loss: Undefined Break Evens: 58.60/65.82 Theta: 3.01 Delta: .78 The second's a defined risk trade using the same strikes for the short options as used in the short strangle: June 16th 57/60/65/68 Iron Condor POP%: 52% Max Profit: $93/contract Max Loss/Buying Power Effect: $209/contract Break Evens: 59.09/65.91 Theta: 1.19 Delta: -4.16 Notes: I would look to manage either of these at 50% max. I considered one additional setup: a Reverse Jade Lizard: June 16th 59/60/64, where the 59/60 is a short put vertical and the 64, a naked short call. This yields a setup with a 70% pop, a max profit of 1.14/contract, a break even at 65.14, and no downside risk (since the credit received for the short call is > the max loss of the short put vert).
AMEX:EWY
by NaughtyPines