1/16/08
sold -5 vertical IWM FEB 75/78 CALL @.38 (mark 69.78)
sold -5 vertical IWM FEB 65/62 PUT @.44
total credit = .82
margin =2.18
72% prob.
1,090 buying power reduction for 5 contracts.
have the following stop orders in:
btc+2 75/78 CALL @.75
btc+2 65/62 PUT @.82
btc+2 75/78 CALL when IWM hits 75
btc+2 65/62 PUT when IWM hits 65
The remaining 1 contract tbd
Trading Plan:
put it on with 30 days to expiry get off in 14-17 days, making 10-15% reward. Now instead of selling a 7 delta strikes (high prob), sell 20 delta strike options, this will equate to a 60% prob of success) This is a different animal, you are only in this trade for 7-17 days, once you have 10%+ you start tightening the noose, taking profits. Max loss 15-16%. You are taking in more theta, faster, in this trade vs. the high prob condor discussed here.
Adjustment: (specific criteria with 5 contracts on) Max risk 15% don't loose more than this. Taking profits at 12-15% of margin, protect profits.
with 5 contracts on, when down 11-12% of the margin/risk, take off 40% or 2 of the loosing side. When it gets to the short strike take off another 40% or another 2, then the other 1 when your down more. this will protect you when the market runs then backs off. were trying to stay in the game, don't want to get shaken out of the game.
1/18/08
BTC +2 vertical 65/62 PUT @.83 (mark 66.62)
original credit @.44
debit loss for 2 PUT contracts = .39
1/22/08
BTC +2 vertical IWM feb 65/62 PUT @1.19 (mark 64.54) triggered my stop condition if IWM trades below 65 get me out.
originally sold @ .44
debit loss for 2 PUT contracts = .75
still holding 1 short PUT vertical contract and 5 short CALL verticals
1/23/08
BTC +5 vertical IWM FEB 75/78 CALL @.10
orig. sold @.38
net credit per contract (5)= .28
only holding the 1 short PUT vertical with a contigency stop order if it hits 55
2/11/08
BTC +1 vertical IWM FEB 65/62 PUT @.05
orig. sold @.44
net credit per contract (1) =0.39
Entire trade = -0.49 loss per contract -22% loss or (-$245)
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