winstonthink 2:06 am on Saturday, August 8, 2020

EWZ

#DiagonalButterfly

BTC EWZ Aug 07 $32 straddle @ 0.77 (sold for $1.38)

STO EWZ Aug 14 $31.5 straddle @ $1.46

Cover is EWZ Jan 2022 long strangle $27 call / $37 put

fuzzballl 10:00 am on Sunday, August 9, 2020

Paper trading this one with you and wasn’t sure what to do so rolled the original 32 straddle out a week for a credit.
- winstonthink 11:24 am on Sunday, August 9, 2020
  
  Obviously one side is always going to be a winner, so I just close out the losing side for the least amount of pain and then sell the next week straddle that is close to ATM. Not an exact science if EWZ is between strikes.
smasty 9:24 am on Monday, August 10, 2020

I’m doing this along w/ you, small size to see nuance. I covered week 1 for a .70 profit and sold this week 32 straddle for 1.60. I assume once you have risk covered on the leap, then add another and begin ratio-selling against the longs.
- winstonthink 2:59 pm on Monday, August 10, 2020
  
  I set the LEAP strangle at a strike that I can roll the initial straddle strangle to for a scratch. So the disaster recovery plan if sh*t happens is simply to roll the side under pressure to the 2022 strike. From the moment I put on the combo trade I forget about the LEAP strangle – I don’t care about it. What I do care about is being able to continuously sell premium on a weekly basis. I started with the first week’s sale as a straddle to get the maximum premium. My plan was then to adjust to strangle sales (expecting more movement in EWZ than has happened so far). I am so far surprised that I have been able to keep up with straddle sales. I am sure that will change down the road, but I’ll enjoy it while it lasts.
  Once you have paid for the LEAPs then it is all gravy.
  
  If one side takes off then I have thought in the past to close out the opposite side that is not being challenged. But now I’m not so sure. I think continue to sell straddles or strangles may be the simplest approach.
  
  I’m always looking for setups that can accommodate a certain size – allowing a scale up. This structure seems to fit the bill. But it’s early days.
  And of course, I’m only telling you what you already know! I’m following you!!!!!!!!!!
  - smasty 6:50 am on Tuesday, August 11, 2020
    
    Thanks Mr. Think! I find that people who master what’s considered “basics” do so due to mastery of nuance. So I love to discover the thought process people have behind that stuff. The scalability is important to me too….I’m always looking for safer cash management options. There’s always a new approach to take….like @fuzzballl ‘s use of ITM call credit spreads in his Jade Lizard setups…that was an eye opener for me, and has become useful taking additional risk off my dumb KODK position 🙂
    - parrothead11 7:13 am on Tuesday, August 11, 2020
      
      Hey Sue! How’s the ankle doing?