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BookingAlpha Option Trading Advisory

Thursday, December 7, 2017

January 2018 RUT Unbalanced Elephant

Trade Details:

20 RUT 1390/1380 Credit Put  spreads 0.55 Credit ($1100)
13 RUT 1605/1610 Credit Call spreads 0.46 Credit ($598)

plus

10 IWM Long 161 Calls @0.25 (-$250)
I didn't add the Long Puts in this case

Net Credit: $1448
Days to Expiration: 43

Profit picture:
(Click on image to enlarge)


A RUT Chart for future reference and self-study:
The below chart screenshot was taken few minutes after order entry and RUT had started to move up.
(Click on image to enlarge)

Trade Update - January 8, 2018

Avoiding risk concentration around RUT 1585 (decision point on the Call side for both the Jan and the Feb Elephant).
Closed the Call side of the January Elephant.

CLOSED 13 RUT 1605/1610 Credit Call spreads 0.25 Debit
Original credit was 0.46 per spread. So, this is a small 0.21 net winner. In 13 spreads and dollar terms that is +$273

At the same time the IWM Long Call component of the Elephant was closed too.
CLOSED 10 IWM Long 161 Calls @0.08 Credit
Original Debit paid was 0.25, so this is a 0.17 loss per contract or -$170 total in dollar terms.

We're closing the Call side of the Jan Elephant for a small +$103 gain and we're only leaving the Put side of the position on (1390/1380), planning to hold it until expiration.

Trade Update - January 19, 2018

The Put side expires:
20 RUT 1390/1380 Credit Put  spreads 0.55 Credit ($1100 profit)

The January RUT Elephant is now entirely closed, resulting in a +$1203 gain (103+1100).


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 2018 Track Record


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