Trade Details:
SELL 40 SPX September 2650/2645 Credit Put spreads @0.30 Credit
SELL 9 SPX September 2925/2935 Credit Call spreads @0.80 Credit
Long hedges:
BUY 9 SPY September 293 Calls @0.40
BUY 1 SPY September 269 Puts @1.22
Total Net Credit: $1,438
Days to Expiration: 38
Risk profile:
SPX Chart for future reference:
Trade Update (August 27, 2018)
Closed CALL side of the Elephant:
9 SPX September 2925/2935 Credit Call spreads @2.65 Debit
Original credit was 0.80. Net loss is 1.85 per spread. A $1,665 loss.
9 SPY September 293 Calls @1.03 Credit
Original debit invested was 0.40. Net gain is 0.63 per contract. A $567 gain.
Combining both pieces, the Call side resulted in a $1,098 loss.
Trade Update (September 21, 2018)
Put side of Elephant expires:
40 SPX September 2650/2645 Credit Put spread. A $1,200 gain.
1 SPY September 269 Puts. A $122 loss.
Net gain: 1200 - 122 = $1078
The September SPX Elephant is now entirely closed.
Combining today's gain with the earlier loss on the Call side, it was a small $20 dollar loser.
Usually when the Call side of an Elephant is closed, it is done at a much smaller loss than the Credit received from the Put side. Typically resulting in a net winning trade overall. However, in this case, the Call side was closed on a morning Monday after a significant gap-up. So, it was closed way beyond its defense line, hence resulting in a larger than normal loss on August 27.
Still, a $20 loser, despite everything, is better than what would have normally happened to a regular Iron Condor or Strangle. The initial short Call options were at strike 2,925 and the market has moved beyond that.
SELL 40 SPX September 2650/2645 Credit Put spreads @0.30 Credit
SELL 9 SPX September 2925/2935 Credit Call spreads @0.80 Credit
Long hedges:
BUY 9 SPY September 293 Calls @0.40
BUY 1 SPY September 269 Puts @1.22
Total Net Credit: $1,438
Days to Expiration: 38
Risk profile:
SPX Chart for future reference:
Trade Update (August 27, 2018)
Closed CALL side of the Elephant:
9 SPX September 2925/2935 Credit Call spreads @2.65 Debit
Original credit was 0.80. Net loss is 1.85 per spread. A $1,665 loss.
9 SPY September 293 Calls @1.03 Credit
Original debit invested was 0.40. Net gain is 0.63 per contract. A $567 gain.
Combining both pieces, the Call side resulted in a $1,098 loss.
Trade Update (September 21, 2018)
Put side of Elephant expires:
40 SPX September 2650/2645 Credit Put spread. A $1,200 gain.
1 SPY September 269 Puts. A $122 loss.
Net gain: 1200 - 122 = $1078
The September SPX Elephant is now entirely closed.
Combining today's gain with the earlier loss on the Call side, it was a small $20 dollar loser.
Usually when the Call side of an Elephant is closed, it is done at a much smaller loss than the Credit received from the Put side. Typically resulting in a net winning trade overall. However, in this case, the Call side was closed on a morning Monday after a significant gap-up. So, it was closed way beyond its defense line, hence resulting in a larger than normal loss on August 27.
Still, a $20 loser, despite everything, is better than what would have normally happened to a regular Iron Condor or Strangle. The initial short Call options were at strike 2,925 and the market has moved beyond that.
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