That graph only shows the current and expiration dates. Which is great for those people that prefer to put them on and let them go through expiration.
I prefer to get out a few days before (or whenever I can get a good return on my risk).
When I set up this trade, I don't use expiration, I use +4 DAY STEP (or any other number).
I change the number of days per step until the latest date is closest to the expiration date. If I want to see the expiration profit line then I would adjust today's date up or down a few days.
Right now I am looking at it as a +4 DAY STEP, 10 days/step, using 7/13 as the current day.
I am looking at the profit and breakeven lines for the 3rd step which is 8/12.
Per contract, I see 414 in margin required.
If the OIH price were to stay in the middle by 8/12 I could get a maximum profit of 150 with breakeven points of 78 and 101 (withour commissions)
If the price moved to either end of the range, I would be tempted to allow more time to pass and get closer to expiration where the maximum profit would skyrocket near the strikes that were shorted.
I would like to hear from anyone that has a good strategy for adjusting this position if the OIH price moves past the short strikes quickly (meaning that the position would be in a losing range).
I have multiple brokers and I would be tempted to place this at a broker with a flat rate (like OptionHouse) where I can place 2 ICs for $15 each to establish this position.
Otherwise, I am comparing this position to a simple butterfly at the 90 strike. It seems to have 90% of the profit range, but I can double my investment by the 3rd step line date if the OIH price is around 90.
I would like someone to repeat some suggestions for adjusting this butterfly also.
I was also comparing this to calendar and double-calendar and double-diagonal strategies, but Sept. options are not available until after JUL expiration, and OCT/AUG calendar spreads don't have the ROI that the butterfly does.
Mark
--- In OptionClub@yahoogro
>
> Hey gang,
>
> Just thought I would ask... I was thinking of putting on a BWB on both sides
> (Calls and Puts)
> and wanted to know what everyone thought about doing this or should I stick with
> an IC.
> Is the Lottery ticket on the wings of the IC worth it?
>
> Here is the trade and I attached the a TOS pic as well:
>
> +1 OIH Aug 09 85Â PUT
> -3 OIH Aug 09 80Â PUT
> +2 OIH Aug 09 75Â PUTÂ (0.34 Credit)
> +1 OIH Aug 09 95Â CALL
> -3 OIH Aug 09 100 CALL
> +2 OIH Aug 09 105 CALL (0.52 Credit)
>
> Thanks,
>
> Joey
>
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