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RUT is trading at 1706 and we’re going to scale Tier 2. We’re going to add a put butterfly centered at 1690 with a 50 point wing on the downside and a 40 point wing on the upside.
Buy To Open 1640/1690/1730 put butterfly
Order Ticket Type Asset Duration Strike C/P BTO RUT 17 AUG 18 1730 Put STO X2 RUT 17 AUG 18 1690 Put BTO RUT 17 AUG 18 1640 Put Total Debit: $5.00 Risk Profile:
NOTE: We’re going to make another adjustment with RUT trading above 1720. We will either add 3rd tier put butterfly OR we’re going to roll Tier 1 put butterfly up 60 points.
SPX 31JUL Iron Condor:
This Iron Condor is delta neutral with POP around 87% and 39 days to expiration. Not looking to make any adjustments next week unless SPX trades down to 2680 or above 2820.
RUT 20JUL EIP:
This position is in a decent spot with 28 days to expiration. I’m looking to make adjustments if RUT trades below 1640 or above 1710. On the downside, I’ll look to remove a butterfly centered at 1680 and on the upside I’ll look to add a butterfly centered at 1710.
RUT 17AUG EIP:
This position is in a good spot with 56 days to expiration. I’m looking to make adjustments if RUT trades below 1650 or above 1720. On the downside, I’ll look to remove Tier 2 butterfly, on the upside I’ll look to add Tier 3 (centered at 1720) or roll Tier 1 butterfly to 1730.
AAPL 27JUL Bull Put spread:
This put spread is holding up well with FANG stocks under pressure the last couple of days. I’ll look to add Tier 2 IF/WHEN this spread trades at 1.20 credit or close Tier 1 IF/WHEN it trades at .20c (to close).
If you have any questions please stop by the chat and ask.
We’re going to Buy To Close 2865/2875 Bear Call spread and Close out the OTM hedge, leaving just 2600/2590 Bull Put spread on
Close out Call spread:
Order Ticket Type Asset Duration Strike C/P Buy To Close SPX 31 JUL 18 2875 Call Sell To Close SPX 31 JUL 18 2865 Call Total Debit: $0.30 Close out the hedge:
Order Ticket Type Asset Duration Strike C/P Sell To Close SPX 31 JUL 18 2910 Call Total Credit: $0.50 Risk Profile:
We’re going to reduce out directional exposure here. Right now, we have 2 butterflys open:
1) 1590/1640/1670 Put Butterfly (Tier 1)
2) 1630/1680/1730 Put Butterfly (Tier 2)We’re removing Tier 2 butterfly. This will leave Tier 1 open with no upside risk.
Order Ticket Type Asset Duration Strike C/P STC RUT 20 JUL 18 1730 Put BTC X2 RUT 20 JUL 18 1680 Put STC RUT 20 JUL 18 1630 Put Total Credit: $18.50 Risk Profile:
We’re going to remove more of the downside risk here by rolling 1590 put up to 1600.
Order Ticket Type Asset Duration Strike C/P Buy To Open RUT 20 JUL 18 1600 Put Sell To Close RUT 20 JUL 18 1590 Put Total Debit: $1.60 Risk Profile:
RUT is trading at 1633. We’re going to close out Tier 2 butterfly, leaving Tier 1 on.
Order Ticket Type Asset Duration Strike C/P STC RUT 17 AUG 18 1730 Put BTC X2 RUT 17 AUG 18 1690 Put STC RUT 17 AUG 18 1640 Put Total Credit: $3.40 Risk Profile:
We’re going to exit this trade with 21 days to expiration. More advanced traders could look to milk this trade a bit further by managing NET delta to keep it relatively flat.
Order Ticket Type Asset Duration Strike C/P STC RUT 20 JUL 18 1670 Put BTC X2 RUT 20 JUL 18 1640 Put STC RUT 20 JUL 18 1600 Put Total Credit: 3.50 Risk Profile:
SPX at 2705
VIX at 17.36
I’m looking to sell an Iron Condor in 31AUG expiration cycle with 59 days to expiration.I am looking to sell a Bear Call spread that pays close to .85c credit and a Bull Put spread that pays around .85c as well, for a total credit of 1.70 or higher. I want to keep my credit fairly balanced between both spreads. For example, I don’t want to see 1.20 credit for one side and .50c for the other. I want to keep credits as close to .80-.90 per side.
I’m selling:
2510/2500 Bull Put spread
2860/2870 Bear Call spreadOrder Ticket Type Asset Duration Strike C/P Buy To Open SPX 31 AUG 18 2870 Call Sell To Open SPX 31 AUG 18 2860 Call Sell To Open SPX 31 AUG 18 2510 Put Buy To Open SPX 31 AUG 18 2500 Put Total Credit: 1.70 Risk Management: I will use OTM options to hedge this Iron Condor when 2860 Call’s delta reaches 20 and 2510 Put’s delta reaches 25.
Price levels for adjustments: 2750 and 2630
Profit Target: 50-80% credit
MAL: -25% RORRisk Profile:
RUT is currently trading around 1690, +60 points since we had to scale out of T2 last week.
I’m going to add the second round of put butterflys centered at 1690 with a 50pt wing on the downside and a 30pt wing on the upside. This will re-balance my NET delta to neutral, increase theta and add risk on the downside.Order Ticket Type Asset Duration Strike C/P BTO RUT 17 AUG 18 1720 Put STO X2 RUT 17 AUG 18 1690 Put BTO RUT 17 AUG 18 1640 Put Total Credit: 0.20 Risk Profile:
SPX at 2762 (+57pt since entry or +2.1%)
We’re going to roll up original 2510/2500 put spread up to 2600/2590.
We’re BUYING TO CLOSE 2510/2500:
Order Ticket Type Asset Duration Strike C/P Buy To Close SPX 31 AUG 2510 Put Sell To Close SPX 31 AUG 2500 Put Total Debit: 0.50 And we’re SELLING TO OPEN 2600/2590:
Order Ticket Type Asset Duration Strike C/P Sell To Open SPX 31 AUG 2600 Put Buy To Open SPX 31 AUG 2590 Put Total Credit: 0.90 NOTE: This will increase overall credit by 0.40c and it’ll help to pay for any adjustments we may need to make on the upside. 2860 Call’s delta is 15 and we’ll need to adjust when it hits 20.
Risk Profile:
We’re going to close out the remaining part of this Iron Condor, the original 2600/2590 Bull Put spread:
Order Ticket Type Asset Duration Strike C/P Buy To Close SPX 31 JUL 18 2600 Put Sell To Close SPX 31 JUL 18 2590 Put Total Debit: $0.35 NOTE: Overall, this was a pretty easy trade to manage. We bought a hedge when the call side got threatened and ended up closing out the original call spread and removing the hedge. Now with the puts trading at .35c – we end up making about $1,100 on the Iron Condor, and we lost about $520 hedging, for a NET profit of about $580
Risk Profile:
SPX at 2781.
Our short strike (2860 Call) on the upside is currently around delta 20. That means it is time to add an upside hedge to remove some of the directional exposure in case SPX continues to rally. To make this adjustment we’re going to have to look at our NET greeks, specifically DELTA. Our goal is to reduce our Delta exposure. We want to cut it by 2/3.
Right now our NET delta (10 lot Iron Condor) is -25. This means we need to add about +15 delta. We can look to buy (1) 15 Delta Call, (2) 7 Delta Calls, (3) 5 Delta Calls and so on. We don’t want to go much lower than 7 delta as the hedge becomes less effective. We’re going to add (2) 2910 Calls, they’re 7.5 delta, which will add a total of 15 and take our NET delta from -25 to -10. This is how our NET greeks will change:
And this is what the Risk Profile will look like:
Order Ticket Type Asset Duration Strike C/P Buy To Open SPX 31 AUG 18 2910 Call Total Debit: 2.50 SPX at 2785
VIX at 12.39We’re going to put on an Income Trade in SPX 7SEP expiration cycle with 59 days to expiration. We’re going to use all Puts to structure this trade.
This is a Broken Wing Put Butterfly.
We’re selling options about 40 points below the market while buying wings 50 points below the short strike and 40 points above the short strike.
Here’s what the Risk Profile looks like:
This is a delta neutral trade at entry. Our goal is to capture around 15% return on risk. Our risk management plan is:
On the upside, we’re looking to roll upper long puts down IF/WHEN SPX trades about 40 points above upper long put.
On the downside, we’re going to look to cut NET delta IF/WHEN SPX trades 30-40 points below the short strike.
Planned capital: This trade could require around 5K per 1 lot, but the initial margin will start out around 2K.
Order Ticket Type Asset Duration Strike C/P BTO SPX 07 SEP 18 2780 Put STO X2 SPX 07 SEP 18 2740 Put BTO SPX 07 SEP 18 2690 Put Total Debit: 1.80 RUT 17AUG EIP:
This trade is delta neutral right now as RUT sitting at 1685. We’re not looking to make any adjustments unless RUT trades above 1715 or below 1650. On the downside, we’ll look to scale out of Tier 2 butterfly and on the upside we’ll look to either roll Tier 1 up 60 points or add Tier 3 butterfly, 30 points above Tier 2.
SPX 31AUG Iron Condor:
This Iron Condor is holding up well. We’ve hedged this position on the upside and rolled original put spreads higher to help cover the cost of the hedge. We’ll look to roll up our Bear Call spreads when short strike’s delta reaches 30. Overall, this position is holding up well, and we just need to let it simmer and work itself out.
SPX 7SEP Broken Wing Put Butterfly:
This position needs no attention at the moment. We’re aiming to capture about 15% return on risk OR make adjustments above 2820 or below 2710. This is a very boring trade during quiet or slow-moving markets so we’ll try to stay awake until we either exit or adjust.
If you have any questions, feel free to post on the Member Forums (https://mrtoptick.com/member-forum/) or stop by the chat and ask.
SPX at 2810.
SPX is trading higher today after some early weakness on the back of earnings from GS and NFLX.
We’re going to roll upper long put down 10 points from 2780 to 2770. This is going to add positive delta to the trade while increasing theta. This is how the GREEKs will change:
This adjustment is the same trade as adding a Bull Put spread. We’re selling (to close) 2780 put and we’re buying (to open) 2770 put. Just like any Bull Put spread, this adjustment will be a NET credit transaction. We’re adding some risk on the downside while removing or minimizing risk on the upside.
Order Ticket Type Asset Duration Strike C/P Sell To Close SPX 07 SEP 18 2780 Put Buy To Open SPX 07 SEP 18 2770 Put Total Credit: 2.40 Risk Profile:
