I had a lot of 273 naked puts for today’s expiration (BTW, I love using Wed expiration for assignments so I don’t have to wait for over a weekend to hedge in 401K accounts. In non-401K I will sell calls in advance of assignment but you can’t do that in 401K accts). I was able to cover my puts for 25% profit today, then I flipped them to #BigLizard trades.
SPY May 23 -272.5p/-272.5c/+273.5c for 2.03 cr. Doing a Lizard brought in 25% extra premium vs. doing an ATM put only. Break even is 270.47 on these.
It looks like I will get an assignment on $274 SPY shares. Rather than sell calls-only against that position, I will explore a reverse Jade Lizard to bring in some put revenue, similar to a covered strangle, but less risk. I’ll update this after the close.
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.
#Earnings – Not sure what this is called. Skewed iron condor maybe? I’m looking at it like a #JadeLizard with a disaster put. Selling at near the expected move on each side but with no upside risk and a disaster put just in case.
Sold NVDA MAY 11 2018 242.5 Puts and 272.5/275 Bear Call Spreads @ 2.72 (Jade Lizard)
Using some of the extra 22 cents to buy disaster puts 20 points below the sold put. If this stock misses earnings by a mile it could really implode (guessing).
Bought NVDA MAY 11 2018 222.5 Puts @ .17
Net credit of 2.55 with zero upside risk. If it implodes I’ll look to roll the puts or move it all into a #LongCalls #LEAPS type trade.
EDIT: What do I want the stock to do? As little as possible! Just like a strangle…stay between my short strikes…
#Earnings – Haven’t done anything yet. Kinda busy moving my daughter today. This stock is completely out of control so is it a “sell the news”? Not sure but looking at big wide strangles for now or possibly another #JadeLizard with the 2.5 wide strikes available.
#Earnings #JadeLizard (sort of) – Having a great earnings season so almost decided to sell very aggressive strangles in this. Common sense took over but still staying aggressive while limiting upside risk to 45 cents with a Jade Lizard style trade…(sell puts and call spreads where the call spreads are narrow enough to eliminate or minimize up side risk).
Sold ROKU MAY 11 2018 35.0 Puts and 41.0/44.0 Bear Call Spreads @ 2.55
Eliminates most of the upside risk and brings breakeven on the put side down to 32.45 which is near the expected move and below the 20 and 50 day moving averages.
What’s the plan then? Lots of possibilities here. Stock blows out to the upside could book long calls and roll short calls into a new strangle or just sell a few puts right at the open to bring in 45 cents and get out even.
If the stock blows out to the downside could sell more calls near the short puts and wait a couple days and see what happens. Could then roll or ultimately turn this into a Jan 2020 LEAPS style position.
#jadelizard #ironcondor CELG
Tastytrade idea July 20, 70/90/90/95 for 6.96 (modified from 60) , profitable above 82.82
Another lesson in not trading naked calls/strangles in individual names. ANDV most recently TSO is up 24 points in the last 3 days. Apparently buyout by marathon oil.
#jadelizard trades for individual names, strangles only in indexes………
I had a strangle briefly a few weeks ago as a recovery, good thing I unwound it. I will take lucky over good some days!!