We're rolling the remainder of this position into an iron condor, with the following iron-condor order: Day limit order Buy to open 1 SPY Nov 134 calls Sell to open 1 SPY Nov 132 calls Sell to close...
Friday, September 9, 2011
We’re reducing the delta of this position and taking in a credit exceeding the butterfly’s current value with the following iron-condor trade: Day limit order Buy to close 1 SPY Sep 128 call Sell to close 1 SPY Sep 121 call Sell to open 1 SPY Sep 108 put Buy to open 1 SPY Sep 101 put for a net credit of $1.02 or better. Note that 1 contract represents all of our long call…
Thursday, July 28, 2011
Incredibly, “the market” still seems to be pricing in relatively little risk that Congress and the President won’t be able to reach a deal on raising the U.S. debt ceiling. Perhaps the consensus is right, but the degree of consensus and relative complacency strikes me as dangerous. If the “unthinkable” happens, the rush for the exits will be fast and furious; if a deal does go through, the initial rally is likely to be very sharp. Either scenario is bad…
Wednesday, July 13, 2011
Given the strength and breadth of this morning’s rally, members who are long the SPY Jul/Aug 129/135 strangle hedge position from yesterday might consider closing just the put side, as follows:: Day limit order Sell to close 4 SPY Jul 129 puts for a net credit of about $0.09. Note that the 4 contracts above represent the entire position taken in the long July 129 puts. The idea here is to hang onto the 135 calls to hedge…
Tuesday, June 14, 2011
When using an overnight hedge, one typically would close the position the next morning if the underlying is trading flat or opposite the direction of the hedge. That’s the simplest approach, and even with this morning’s 1% gap up, probably the best way for most traders to unwind the hedge trade. Nevertheless, advanced traders might consider the following alternatives: June Call Butterfly If you’re bullish and willing to retain the additional downside risk, you could leave the 127/127 bull…
Monday, June 13, 2011
Even with this afternoon’s strong comeback from a new 60-day intraday low, there still are signs of technical weakness in the S&P: Momentum and cumulative volume breadth remain bearish on the daily chart of SPX; S&P Mini futures appear headed for a close below daily pivot resistance and intermediate-term downtrend resistance; SPY has turned back from short-term resistance at last Wednesday’s low ($128.18). On the bullish side, SPY is back above support at its 2011 low; Momentum…
Wednesday, March 16, 2011
Risk-averse members who want to stop out of our IBM Supplemental Trades this afternoon may consider the following butterfly order: Day limit order Sell 1 IBM Mar 160 put Buy 2 IBM Mar 155 puts Sell 1 IBM Mar 150 put for a net credit of $2.28 or better. The number of contracts specified above represents our entire position in IBM March Butterfly Hedge #3. Also note, again, that as a Supplemental Trade, this order will…
Wednesday, March 9, 2011
After the previous closing trade, our IBM portfolio delta bias still exceeds our upper risk-management threshold. I expect today’s bullish reaction to IBM’s investor conference on Tuesday to settle out in coming days, with IBM testing support at $166, and possibly even $164. In light of the whipsaw risk, we’re using a calendar spread (long vega) to hedge the upside this morning: Day limit order Buy to open 6 IBM Apr 170 puts Sell to open 6 IBM…
Wednesday, March 9, 2011
We’re reducing upside risk in our Supplemental Trades portfolio in two steps. First, we’re closing the 150/160/170 hedge position. The following order will take some patience, as it anticipates a retracement to IBM $166.50: Day limit order Sell to close 2 IBM Mar 170 puts Buy to close 4 IBM Mar 160 puts Sell to close 2 IBM Mar 150 puts for a net credit of $3.38 or better. Note that the number of contracts specified…
Thursday, March 3, 2011
March implied volatility in IBM options is still a bit high for a calendar entry, so we’re hedging the upside with another butterfly, as follows: Day limit order Buy to open 4 IBM Mar 175 calls Sell to open 8 IBM Mar 170 calls Buy to open 4 IBM Mar 165 calls for a net debit of $1.02 or better. Note that the 4 contracts specified above for the butterfly wings represent the same number of…
Thursday, February 24, 2011
We’re hedging our SPY Mar/Apr calendar positions with the following butterfly trade: Day limit order Buy to open 1 SPY Mar 135 put Sell to open 2 SPY Mar 129 puts Buy to open 1 SPY Mar 123 put for a net debit of $2.04 or better. Note that the 1 contract specified above for the wings represents half the number of contracts in our existing positions. Analysis: We’re hedging our March positions with a negative-delta,…
Jared Woodard is a registered commodity trading advisor who specializes in trading volatility as an asset class. With over a decade of experience trading options, futures ... Read More
© 2013 Condor Options. Powered by Wordpress.
Friday, November 11, 2011
0 Comments