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BookingAlpha Option Trading Advisory

Friday, April 21, 2017

June 2017 RUT Unbalanced Elephant

Trade Details:

20 RUT 1220/1230 Credit Put spreads 0.66 Credit ($1320)
8 RUT 1470/1480 Credit Call spreads 0.92 Credit ($736)

plus

2/15 IWM 126/148 Unbalanced Long Strangle (.95 debit for the 126 strike Puts, .24 debit for the 148 strike Calls. Total debit paid: $550 )

Net Credit: $1506
Days to Expiration: 56

Profit picture:(Click on image to enlarge)



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


Trade Update - May 8, 2017
As planned over the weekend, I'm closing the Call side of this Elephant.

Closed 8 June RUT 1470/1480 Credit Call spreads, 0.65 debit
Original credit was 0.92 per. Net gain of 0.27, which is $216 in dollar terms for 8 spreads

Closed 15 June  IWM 148 long Calls. 0.15 credit
Original Debit paid was 0.24. Net loss = 0.09. In dollar terms $144 for 15 contracts.

Net-Net the entire Call side of the Elephant was closed for a small gain of  $72
RUT has declined much more than SPX, and yet the 1470 short Calls were still at 9 deltas. I took some heat initially with this position, so, I'm closing here with the idea of redeploying it on an eventual rebound as June expiration is still far in time.

Put side of the position looking great and remains in play.

Trade Update - May 26, 2017

Closed 20 June RUT 1230/1220 Credit Put spreads, 0.10 debit
Original credit was 0.66 per. Net gain of 0.56, which is $1,120 in dollar terms for 20 spreads

Closed 2 June IWM 126 long Puts. 0.12 credit
Original Debit paid was 0.95. Net loss = 0.83. In dollar terms $166 for 2 contracts.

Net-Net the entire Put side of the Elephant resulted in a gain of  $954

The entire Elephant is now closed. Combining the Call and the Put side, the total gain was $1,026
We were in the position for 5 weeks and we are done 3 weeks before expiration.

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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