[TheOptionClub.com] Re: Update on Reverse IC Positions

 

Ricky

Some ideas for the Goog trade; currently +540c -550c -560c +570c condor; with Goog closing at 564.21; 14 days to expiry;

- sell off either 540/550/560 or 550/560/570 Fly which should result in 'free' fly left on the table
- buy 560/570/580 Fly to stretch condor to 540/550/570/580
- buy 560/570 call spread if very bullish
- buy 540/550 put spread if bearish

Cheers
James

--- In OptionClub@yahoogroups.com, Ricky Jimenez <rickyjim@...> wrote:
>
> GOOG
> ---------
> On Wednesday, 3-3 the position was +510p -520p -530p +540p +540c -550c
> (2 contract each, red graph). On Thursday GOOG rallied past 550 so I
> decided to ditch the lower 3 options of the put condor. So the trade
> was:
> -510p + 520p + 530p for a debit of 2.5 (.6,1.1,2). Resulting in:
> 540p +540C - 550C as in the blue graph. The idea was to wait for
> another big move as GOOG is in the habit of doing. If GOOG tanked,
> the 540 put would become very valuable. If it surged up, I could get
> some good premium by selling the 560/570 call spread giving me a call
> condor. The up move happened today and when GOOG was about at 562, I
> put on -540p -560c +570c for a 6.50 credit (2, 9.70, 5.20) so I am
> left with the condor:
> +540c -550c -560c +570c (black graph). This condor has a reward to
> risk ratio of 11.5 to 1 and is still in the profit zone, something
> that is not possible if you put on a condor all at once.
>
> IWM
> ------
> On 5-4 the position was:
> -2*62p +63p +64c -2*65c +66c (26 copies), a combination of a put ratio
> and a call fly (see blue graph). I said in a previous posting that if
> IWM went passed 66, I would sell the 63 put and extend the fly to a
> condor. That is exactly what I did today:
> -63p + 65c - 2*66c + 67c for a .02 debit (.17, 1.72, 1.04, .55). The
> result: -2*62p +64c - 65c -66c + 67c shown in the black graph.
>
> As for the other positions, I started out with a -190p +200p +210c -
> 220c in AAPL. Not much movement until today when I got rid of the
> puts. I could have closed the entire position for a 30% profit but
> since only play money is at stake, I will keep all the positions until
> expiration to practice as much as possible. I also have IBM and RIMM.
> Neither has moved enough to have done anything. IBM is showing a 50%
> loss on a 120,125,130,135 reverse IC while RIMM is showing a 23% loss
> on a 65,70,75 reverse iron butterfly.
>
> If there is a better way I can present the progress of these trades,
> please let me know. And of course, you are all welcome to kibitz on
> how I could be doing better.
>

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