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Friday, January 5, 2018

February 2018 RUT Unbalanced Elephant

Trade Details:

40 RUT 1455/1460 Credit Put  spreads 0.30 Credit ($1200)
16 RUT 1625/1630 Credit Call spreads 0.48 Credit ($768)


17 IWM Long 163 Calls @0.22 (-$374)
2   IWM Long 147 Puts @0.70 (-$140)

Net Credit: $1456
Days to Expiration: 42

Profit picture:
(Click on image to enlarge)

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

Trade Update - Jan 11, 2018

CLOSED 16 RUT 1625/1630 Credit Call spreads @1.30 debit
Original credit was 0.48. Loss: 0.82 per spread. Total Loss $1,312 (16 spreads)

CLOSED 17 IWM Long 163 Calls @0.62
Original debit paid was 0.22 per contract. Gain: 0.40. Total Gain $680 (17 contracts)

Net-net the Call side of the Elephant results in a $632 loss (-$1312 +$680). The Put side is in play and it contains a net credit of $1,040. Enough for the Elephant to become a winner.

Elephants do not suffer nearly as much as Iron Condors during bull rallies, with low volatility as now. This one is an example that in all likelihood will end up being a net winner in the end, and this, without fighting the Call side at all. No uncomfortable adjustments, no headaches. I'm about to totally switch to Elephants at this point and abandon Iron Condors for a while (even though I played them Unbalanced with a smaller Call exposure).

Finally a RUT Chart for future reference

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 2018 Track Record

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

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