OPENING: XLE JULY 20TH 67 LONG/APRIL 27TH 71 SHORT CALL DIAGONAL
Updated
... for a 3.14/contract debit (78.5% width of spread).
Another neutral to bullish assumption setup with plenty of time to reduce cost basis. Currently, it looks like you could get a better fill than I did (mid currently at 3.00, 75% of the width of the spread, which is what you're looking for in these setups).
Here, I'm shooting for 20% of what I put the trade on for.
Metrics:
Max Profit: .86/contract*
Max Loss: 3.14/contract
Theta: .37
Delta: 32.33
* -- Assuming no rolls of the short call and finish of the underlying above the short call strike at expiry.
** -- Assuming no rolls of the short call and finish of the underlying below the long call strike at expiry.
Another neutral to bullish assumption setup with plenty of time to reduce cost basis. Currently, it looks like you could get a better fill than I did (mid currently at 3.00, 75% of the width of the spread, which is what you're looking for in these setups).
Here, I'm shooting for 20% of what I put the trade on for.
Metrics:
Max Profit: .86/contract*
Max Loss: 3.14/contract
Theta: .37
Delta: 32.33
* -- Assuming no rolls of the short call and finish of the underlying above the short call strike at expiry.
** -- Assuming no rolls of the short call and finish of the underlying below the long call strike at expiry.
Trade active
Well, the bottom fell out of that fairly quickly. Rolling the April 27th 71 short call to the May 18th 70 for a .52/contract credit. Cost basis is now 3.18 - .52 = 2.66.Trade active
Continued weakness ... . Rolled the May 18th 70 down to the May 18th 69 (30 delta) for a .23/contract credit; cost basis at 2.43. Although I've rolled down the spread to a two-wide (which is narrower than my cost basis), we haven't seen $69 for a while here ... .Trade closed manually
Rather than attempt to "fix" my overly aggressive roll-down to the 69 strike, I'm covering the entire diagonal here for 2.35, resulting in a small loss (.08/$8). I'll re-up on weakness and try to be a little more patient, a little less knee jerk next time around.
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