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Friday, February 3, 2017

March 2017 RUT Unbalanced Elephant

 Trade Details:

20 RUT 1245/1235 Credit Put spreads 0.64 Credit ($1280)
8 RUT 1450/1460 Credit Call spreads 0.91 Credit ($728)

plus

2/16 IWM 127/146 Unbalanced Long Strangle (.80 debit for the 127 Put, .23 debit for the 146 Calls. $528 total debit)

Net Credit: $1480
Days to Expiration: 42

Very low volatility environment. The long Strangle portion of the Elephant acting as hedge, even though it eats into the overall credit received. It's simply time to lower expectations.

Profit picture:
(Click on image to enlarge)


A RUT Chart for future reference and self-study:
(Click on image to enlarge)

Trade Update - March 6, 2017

Closed 20 RUT 1245/1235 Credit Put spreads 0.08 debit. 
Original credit was 0.64. Net 0.56 gain per spread ($1,120)

Closed 8 RUT 1450/1460 Credit Call spreads 0.20 debit.
Original credit was 0.91. Net 0.71 gain per spread ($568)

Closed 2/16 IWM 127/146 Unbalanced Long Strangle.
0.09 credit for the 127 Put. Original Debit was 0.80 per contract. Net loss 0.71 per contract (-$142)
0.02 credit for the 146 Call. Original Debit was 0.23 per contract. Net loss 0.21 per contract (-$336)

Overall, the Elephant resulted in a $1,210 gain  (+1120 + 568 - 142 - 336)

Position held for 31 days and closed 11 days before expiration. The gain obtained represents 82% of the maximum potential gain.


For details about the management of Unbalanced Elephant positions consider an LTOptions.com 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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