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BookingAlpha Option Trading Advisory

Friday, January 6, 2017

February 2017 SPX Unbalanced Elephant

Trade Details:

20 SPX 2125/2115 Credit Put spreads 0.55 Credit ($1100)
8 SPX 2350/2360 Credit Call spreads 0.90 Credit ($720)


2/12 SPY 216/236 Unbalanced Long Strangle (.77 debit for the 216 Put, .31 debit for the 236 Calls. $526 total debit)

Net Credit: $1294
Days to Expiration: 42

Very low volatility. The long Strangle portion of the Elephant will act as hedge. Time to lower expectations.

Profit picture:
(Click on image to enlarge)

Trade Update - February 3, 2017

The position has been closed as follows:

20 SPX 2125/2115 Credit Put spreads 0.05 Debit (Original credit was 0.55. Net Gain 0.50. In 20 spreads = $1000
8 SPX 2350/2360 Credit Call spreads 0.30 Debit (Original credit was 0.90. Net Gain 0.60. In 8 spreads = $480)

In addition:
2/12 SPY 216/236 Unbalanced Long Strangle was also closed:
0.12 credit for the 216 Put (originally 0.77 debit) A 0.65 loss = $130 in 2 contracts
0.06 credit for the 236 Call(originally 0.31 debit) A 0.25 loss = $300 in 12 contracts

Overall we made $1,480 from the credit spreads while losing $430 on the SPY hedges.
Net-net that is a $1,050 gain.

28 days in the position. 14 days still left to expiration at the moment of taking it off the table. I could have probably squeezed a few more dollars out of the position, but a plan is a plan.

For details about the management of Unbalanced Elephant positions consider an membership, where there is also material that discusses how to put this type of position in small accounts too.

Check out 2017 Track Record

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