Trying to get my head around these and would appreciate if you could explain a couple of points!
Are these similar to long condor spreads but opened with a credit?
Assume max profit is the credit received, if not how is the target profit calculated?
I followed your UNH trade for 2.25 (only one as test)
STO XLY Sep28 1/-2/-1/2 116/115/114/112.5 PUT/PUT/PUT/PUT x7 @ .34 credit
Max risk $1862. BE 113.83. Credit $238
Management plan: Let it expire for full credit. If ETF price aligns with peak on risk graph, I will sell a 35/20 delta call credit spread in same expiration and try to get out for a scratch.
Defense stocks have taken a huge hit in the last couple days. Rather than trying to save the BA SupaCha box trade, I’m going to eject as Whiz would say. It isn’t cost effective to adjust by selling a call credit spread and buying a put debit spread nor prudent to double down.
NFLX #supercharger Opened Jun22 352.5/357.5c @ 3.86 x2
Just a quick note, I had some expirations but managed to roll all of them for more cash so they are all next week now. The last move like this in Aug. 2015 crushed (and I mean wiped out) a major trading account. Today my main trading account only down about $500, the hedges worked well.
See you can teach old dogs new tricks and thanks to everyone here for showing me some additional tactics that help on days like today.
Everyone have a good weekend, looking forward to Sunday night opening. Either way have some trades lined up and kept some cash on the side lines so I can take advantage of the blood in the street 🙂
Technically what only a 2-3% drop? Technically 2.31% on SPX/ES.
Cue the chicken, I am glad I closed the /ES strangle this morning. Not ITM but the margin would have used up my cash cushion for next week.
#ContangoETFs As discovered by @john4419, NUGT will be forward splitting 5 for 1 on August 24th. That would put today’s price at 28.40. I guess they don’t like it being so expensive… probably cuts down on the volume too much. As @Ramie77 points out, it will likely reverse split again not too long after this forward split.
This will be its first ever forward split. It has reverse split 3 times, April 2013, Aug 2013, and just recently in October 2015.
NUGT was started in late 2010, opening at a split adjusted price of $19,580. Yes, you read that right. That’s why we always bet bearish long-term on ContangoETFs.