Looking at setting up #LongPutDiagonals on $VXX, following @fuzzballl‘s lead.
Effective price of VXX 16 months ago: 255.00.
Price today: 46.23
Projected price in 16 months (Jan 2019): 8.38
Buying Jan 2019 20 puts now for 1.83, they’ll be worth 12.62 at expiration.
This is the perfect opportunity, and I darned near missed it because I was watching UVXY too much. I did a study a couple years back on buying long put LEAPs right after reverse splits. It almost always works, unless a huge correction happens near expiration, which is why you would likely close a couple months early.
And if I sell some call spreads to pay for it… it’s a golden trade.
Am I missing anything?
Options Bistro 