We may be able to reduce our May Supplemental Trades loss a little more by keeping most of our positions open for the next day or two—but only if we begin to take off some risk now. We’re closing the one position with negative theta, and will adjust our delta bias with a second trade to follow shortly.
Here’s the first order:
Day limit order
Buy to close 2 XLE May 84 calls
Sell to close 2 XLE Jun 84 calls
Buy to close 2 XLE May 80 puts
Sell to close 2 XLE Jun 80 puts
for a net credit of $0.53 or better.
Note that the 2 contracts specified above represent our entire position in this trade. Also note that as a Supplemental Trade, this order will not be autotraded—and, of course, anyone who did not participate in the opening trade should ignore this trade alert.
NOTE: Supplemental Trades are optional and primarily intended for more experienced/risk-tolerant subscribers. They are not autotraded, and have no bearing on our core newsletter portfolio; however, we follow up by posting any additional entry or adjustment trades that the Calendar Options risk-management approach may call for. Also note that it’s important for anyone who chooses to participate in Supplemental Trades for a given cycle to follow all Supplemental Trades in that cycle if they wish to match our risk-management profile.