OPENING: XLU DEC 30TH 42.5/46.5/46.5/49.5 IRON FLY
Updated
Adding to my core exchange traded fund fly positions here with this high implied volatility rank underlying. (I already have some XLU on, so just adding a "smidgeon" here). The implied volatilty in this isn't great, but then it's almost never "great" ... .
Metrics:
Probability of Profit: 46%
Max Profit: 210/contract
Max Loss: 190/contract
Break Evens: 44.40/48.60
Notes: Will look to manage this like a short straddle -- at 25% max profit ... .
Metrics:
Probability of Profit: 46%
Max Profit: 210/contract
Max Loss: 190/contract
Break Evens: 44.40/48.60
Notes: Will look to manage this like a short straddle -- at 25% max profit ... .
Note
"Penny chased" this fill a little bit ... . Filled at 2.08 ($208) credit/contract.Note
Covering here for a 1.65 db. In for 2.10, out for 1.65; $45 gross profit; $33 net profit after fees/comms.Note
A small tip with "iron flies": Instead of attempting to close out the entire setup, look to close out just the short straddle first, particularly if the long wings have gone "no bid." You can then either look to take the long options off separately if they're eventually bid at some point or wait for them to expire worthless ... .
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