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Shortcallvertical

CLOSING: /CL NOV 15TH 66.5/67.5 SHORT CALL VERTICAL... for a $20 debit/$70 profit. Notes: Peeling off some call side on approaching worthless. Ordinarily, I would attempt to pair off call side with put side, but the November put side is somewhat "troubled" here on this down move, so will just have to wait to address that side on the grind into expiry. The other note of practical importance: these spreads trade in .10 increments, so you have to get out at .10, .20, etc. Although I like to wait for <.10, that generally doesn't occur until the very last part of the cycle.
CShort
by NaughtyPines
OPENING: GC1! NOV 25TH 1595/1605 SHORT CALL VERTICAL... for a 1.10 ($110) credit. Notes: An adjustment trade, adding some short delta to my October position, which has drifted slightly long. Because October only has 31 days left in it, I'm going out another month with my hedge since a similarly delta'd spread farther out in time is more distant from current price than the same delta'd spread sold in shorter duration, so I'm less likely to get whipsawed. Will look to take the whole package off -- the October iron condor and the November short call vertical -- at the same time. I got the original iron condor filled for 1.60, so my scratch point on the whole thing is 2.70. My original profit target was to make .80, so will start to look to take profit when the whole position is at 1.90. The additional advantage with /GC is that it's in little bit of contango, so I get a slight additional edge or room to be wrong by selling the hedge out in time. This is because the delta of the strikes is relative to where the corresponding futures contract is trading, and November is trading a little bit higher than October, December a bit higher than November, and so on. This naturally isn't always in the case in every commodity. With /CL, for example, it would less of an advantage to hedge farther out in time because it's currently in backwardation.
COMEX:GC1!Short
by NaughtyPines
OPENING: XOP 2 X DEC 21ST 35.5/39.5 SHORT CALL VERTICAL... for a .40/contract credit. Notes: This will finish my clean up of my XOP December cycle core position. (See Post Below for all the shenanigans). I've now got "unit balance" (same on put side as on call side), as well as a smaller number of units in total. My scratch point in the position for the December cycle is 5.15/contract, and the net delta of the position remains long running into opex. I'm profitable for the cycle in the underlying, but would like to milk out a little more, particularly since we may get some OPEC jawboning running in their December meeting (i.e., up), which will naturally benefit what remains of the position.
AMEX:XOP
by NaughtyPines
FXE: TWO BEARISH OPTIONS SETUPSFXE JUNE 16TH 105/108 SHORT CALL VERTICAL The first of the two setups is a "static" short call vertical with a break even around 106 resistance. Metrics: Probability of Profit: 58% Max Profit: $120/contract Max Loss: $180/contract BE: 106.20 Notes: Look to manage at 50% profit. FXE JUNE 16TH 107 SHORT CALL/SEPT 15TH 110 LONG CALL DIAGONAL This particular setup gives you some more flexibility in the event we do get some bullish movement in the short term, since you have opportunities to roll the short call for duration and credit during the life of the setup. Unfortunately, the vast majority of metrics for a diagonal are indeterminable from the outset, although the short call here, standing alone, has a probability of profit of 67%. This gives you a fairly high probability that you can completely finance the cost of the long in short order. Metrics: POP%: -- Max Profit: -- Max Loss/Buying Power Effect: $293/contract Notes: Look to roll the short call out for duration when it approaches 50% max profit to the next expiry in which you can receive credit for the roll.
AMEX:FXEShort
by NaughtyPines
TRADE IDEA: JAN 18TH 14.5/17 SHORT CALL VERTIf you're familiar with VIX Term Structure, you'll know that the VIX spot price is currently lower than the front month /VX future. Currently, VIX is at 11.7 and the Jan VIX futures contract is at 14.55. The notion here is that the VIX spot price and the Jan VIX futures contract price will converge at some between now and the Jan VIX futures contract expiry (assuming there isn't a massive IV spike that lays that scenario to waste). Metrics: Probability of Profit: 86% Max Profit: $55/contract Max Loss/Buying Power Effect: $195/contract Break Even: 15.05 Notes: This is one I will just watch and take profit on at an "opportune moment." If volatility does expand such that VIX spot price breaks my short call, I'll just roll the spread out for duration and wait for an opportunity to exit in one of these sub-15 volatility lulls we have from time to time ... . The Max Profit/Max Loss ratio isn't particularly attractive here, but I'm going small and expect to roll for more credit if we do get a pop.
TVC:VIX
by NaughtyPines
TRADE IDEA: VXX DEC 16TH 37/40 SHORT CALL VERTICALA short volatility trade here on the notion that VIX reverts to its mean in fairly short order post-election ... . Metrics: Probability of Profit: 57% Max Profit: $105/contract Max Loss/Buying Power Effect: $195/contract Break Even: 38.05 Notes: This, in all likelihood, will require adjustment at open so that the break even is at or near current price. Look to set it up with the break even at current price and so that you obtain at least one-third the width of the spread in credit (in this case, $100 or more). Look to manage at 50% max profit.
CBOE:VXXShort
by NaughtyPines
BOUGHT TO COVER SPX AUG 19TH 2015/2025 SHORT PUT VERTAlthough I still have a little bit of time on this, it's too little time to effectively roll the short put side up of this setup here without pushing it in too tight to the call side for my taste, so I'm closing the put side out for a .10 ($10)/contract debit here and leaving the call side to dangle for a bit. As always, hope springs eternal that price will break my 2155 short call by expiry so that I can exit the call side. I'll otherwise roll it out as I did this week's SPX setup ... .
TVC:SPX
by NaughtyPines
ROLLING SPY MAY 27TH 208/212 TO JUNE 10TH 209/213More housekeeping ... . With 4 DTE and this 30 handle upmove, this is one of those "too close for comfort" rolls. Truth be told, I'll probably end up rolling it again if we don't come off of this 208 level with some vengeance, but only time will tell. In any event, I got a $40/contract credit for the roll ... . To protect the rolled short call vertical from further upmove, I also sold a June 10th 199/202 short put vertical against it for an additional $27 credit, yielding a June 10th 199/202/209/213 iron condor. And we'll see how that goes ... .
AMEX:SPY
by NaughtyPines