CHRISTMAS PROMOTION
LTOptions at a 33% discount during the Year End Holidays.
Tell me More

Tuesday, August 8, 2017

September 2017 RUT Unbalanced Elephant

Trade Details:

20 RUT 1320/1310 Credit Put spreads 0.60 Credit ($1200)
15 RUT 1475/1480 Credit Call spreads 0.45 Credit ($675)

plus

2/20 IWM Unbalanced Long Strangle. Strike prices 133/148
0.61 debit for each of the 133 strike Puts
0.18 debit for each of the 148 strike Calls.
Total debit paid: $482

Net Credit: $1393
Days to Expiration: 38

A little later than usual. Probably the narrowest of all Elephants I've ever played.
Elephants remain unbeaten (11 for 11) since inception (4 trades last year and 7 trades closed this year so far)

Profit picture:
(Click on image to enlarge)



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

Trade Update - August 18, 2017

With the continued weakness, I'm forced to take a loss on the Put side of the Elephant:

Closed 20 RUT 1320/1310 Credit Put spreads 2.10 debit
Original credit was 0.60 per spread. Net loss is 1.50. For 20 spreads, that is -$3,000 in dollar terms. 

Closed 2 IWM 133 long Puts 1.87 credit
Original debit paid was 0.61. Net gain is 1.26 or +$252 for two contracts.
 

Overall, the loss today was -$3,000 + $252 = -$2,748

A new Credit Put spread was deployed:
SELL 20 September RUT 1250/1240 Credit Put spreads @0.60 
Net credit: $1,200

This is the new position after the adjustment:
15 RUT 1475/1480 Credit Call spreads 0.45 Credit ($675)
20 RUT 1250/1240 Credit Put spreads 0.60 Credit ($1,200)
20 IWM 140 long Calls 0.18 debit (-$360)
Net credit:  $1,515

(Click on image to enlarge)

The Elephant will be an overall loser anyways because the loss taken today is greater than the remaining credit (and max profit potential) in the open position.

Trade Update - August 18, 2017 (later the same day)

Closed 15 RUT 1475/1480 Credit Call spreads 0.07 Debit
Original Credit was 0.45 per spread. Net Gain is 0.38, which means +$570 in dollar terms for 15 spreads.

This is what is now left:
20 RUT 1250/1240 Credit Put spreads 0.60 Credit ($1,200)
20 IWM 140 long Calls 0.18 debit (-$360)

Net Credit: $840


Trade Update - September 15, 2017

Expiration date:
20 RUT 1250/1240 Credit Put spreads expire ($1,200 gain)
20 IWM 140 long Calls 0.18 debit expire ($360 loss)

We have a net $840 profit today.
The entire September RUT Elephant is now closed.
The final result is:
-2,748 + 570 + 840 = -$1,338 which is about 1.3% of the Portfolio


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


Go to the bottom of this page in order to see the Legal Stuff

No comments:

Post a Comment