Not a ton of activity today, I have on enough ITM naked puts that I need to see what shakes out this week before taking on anymore risk.
LMT: I’m still stalking a share assignment for dividend (2.00 div on 5/31) (you guessed it…for Daddy! The “D-word” makes his old eyes light up). Turns out I’ve made way more than the dividend by stalking the dividend, which is as it should be. I’ve done 3 rounds of ratio spreads now, all closed for 70-80%. After closing a 3×5 spread for this week, I put on a #BigLizard #JadeLizard . A Big Lizard is a Jade Lizard using the same strike short put/calls (straddle) plus the protective call. Like a Jade Lizard, if done for a credit greater than the width of the call spread there is no upside risk. By adding the call credit spread onto the naked put, additional premium is collected pushing down that lower break even. I really wish I’d done more Big Lizards this week on stuff vs. naked puts. Here’s my trade:
May 18 -320p/-320c/+322.5c for net 3.62 cr. Since 3.62 is greater than the $2.50-wide call credit spread, there is guaranteed profit to the upside, no upside risk. The break even is figured by simply subtracting net credit from the put strike: $320 – $3.62 = $316.38. I’m running all my LMT’s with 3 contracts.