SAGE 62% PoP Bearish Iron Condor after event
My favorite bearish neutral trade for today.
Losing only upside, I like the extreme high IVR values to play.
Reasons to play this:
1/ After event, big selloff, high implied volatility.
2/ Extreme High Implied Volatility, good for credit strategies
3/ I can boost my original bearish vertical spread with 2 bottom legs at fib 0.786 to boosting my reward almost zero risk to the downside (max loss below strike 35 is $17 ...)
4/ Secure zones are 88$ and the 40$
So the winner is the negative delta Iron Condor Strategy.
Max profit: $483
Probability of Profit: %62
Profit Target relative to my Buying Power: 42%
Max loss with my risk management: ~$250
Req. Buy Power: $1050 (max loss without management at expiry, no way to let this happen!)
Tasty IVR: 92 (ultra high)
Expiry: 45 days
Buy 1 SAGE Jun18' 35 Put
Sell 1 SAGE Jun18' 40 Put
Sell 1 SAGE Jun18' 90 Call
Buy 1 SAGE Jun18' 105 Call
IRON CONDOR for 4.83cr with negative -8.3 delta, because IVR is very high and I'm bearish.
Stop/my risk management : Closing immediately if daily candle is closing ABOVE $90, max loss in my calculations in this case could be 250$. Probability of loss in this way: ~20% .
Take profit strategy: 60% of max.profit in this case with auto sell order at 1.69db. Probability of profit this way: ~80%.
Of course I'll not wait until expiry in any case!
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