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Friday, November 18, 2016

December30 RUT Lazy Elephant

Today I initiated a Lazy Elephant position (clear here for the defintiion), using December30 options


Trade Details:

Buy 10 Dec30 RUT 1180 Put @4.30
Sell 10 Dec30 RUT 1190 Put @5.00
Buy 2 Dec30 IWM 121 Put    @0.80
Sell 10 Dec30 RUT 1390 Call @3.35
Buy 12 Dec30 RUT 1400 Call @2.35

Net Credit: $1,070 ($700 from CPS, $530 from CCS, -$160 debit on the IWM long Puts)
Total Investment: $8,930



A RUT Chart at market close for future reference:

(Click on image to enlarge) 

Trade Update - November 29, 2016

Closed Call side of the elephant:

Bought to Close 10 DEC30 RUT 1390 Call @4.20 debit each
Original credit: 3.35
Balance: -$850     (3.35 - 4.20) * 100 * 10 = -$850

Sold to Close 12 DEC30 RUT 1400 Call @ 2.80 credit each
Original debit: 2.35
Balance: $540      (2.80 - 2.35) * 100 * 12 = $540

Combining both options:  -$850 + $540 = -$310
I'm closing the Call side, reducing upside exposure in the portfolio in the seasonally strongest period of the year. The Elephant as a whole is not a losing trade yet as the Put side is still in play and with enough credit to cover this loss and some.

In addition, there is this RUT 1410/1420 Credit Call spread played during the overbought environment which is now forming a 1180/1190/1410/1420 Iron Condor with the Put side of the Elephant, for a total credit of $1,600 which is enough to eclipse today's small loss.

Trade Update - December 5, 2016

Closed Put side of the elephant:

Closed 10 DEC30 RUT 1180/1190 Credit Put spread @0.10 debit
Original credit: 0.70
Balance: +$600     (0.70 - 0.10) * 100 * 10

Sold 2 DEC30 IWM 121 Puts @ 0.21 credit each
Original debit: 0.80
Balance: -$118      (0.21 - 0.80) * 100 * 2 = -$118

Combining both:  $600 - $118 = $482
Along with the earlier Call side loss of $310 this Elephant ends up being a small $172 winner and it is now completely closed.


Check out 2016 Track Record


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