Position Spreadsheet With Greeks:
Trade Tracking Spreadsheet (Opens in Google Docs)
Trade Overview and Plan:
The $SPX August 19, 2016 BWB is a longer term BWB initiated with 86 DTE. The trade began as the 1970/2025/2070 Put Butterfly purchased for debit of 1.85 on 5/24/2016. If SPX continues higher the position will be adjusted by selling verticals to lift the upper wing and/or rolling. If the market trades lower, the trade simply roll lower.
The maximum desired loss on the position is under $225. The target gain is a 10% return on risk with the potential for more if the market environment is favorable.
Trade Images and Comments By Day:
Trade is still okay.
VIX is up in a big way with the rumors about something across the pond. The position still looks okay.
Everything looks okay and there wasn’t much change today.
The market was up big today and the trade looks good.
The position is essentially unchanged today and everything looks good.
The bounce higher today helped the position. Everything looks good.
The trade is safe and essentially unchanged.
The trade is still safe and there hasn’t been much change since yesterday.
The position is chugging along and still safe. We’ll be watching the market more closely with the recent spike in implied volatility. For now there’s nothing to do.
The position came under a little pressure today, but the trade is still fine from a Greek and market location standpoint.
The market was essentially unchanged and the trade is still healthy. There’s nothing to do but wait.
The trade is healthy.
The trade image is shown below. There’s not much to say at this point, everything looks good.
We were filled on the following adjustment today.
With the S&P seeming like it wants to move higher I made a decision to adjust/add to the position. An updated image of the trade is shown below.
With another day of minimal movement in the market, I decided to let this position sit over the weekend. I’ll be making an adjustment and/or adding early next week.
There wasn’t much of a change from yesterday, but SPX is getting closer to the area where I’m willing to make an adjustment. In the video today we talk about two potential adjustments. Selling the 2025/2020 vertical spread and selling the 1975/2025/2060 BWB. Due to multiple other positions I have open right now, my preference from a risk standpoint is the vertical.
The market (SPX) is still unchanged, but RUT has been moving much higher. If SPX begins to move higher we’ll need to make an upside adjustment to this position. The two options are to sell a 5 point vertical spread near the short strike or to add a 50×35 BWB centered at the same short. The BWB could be sold for a credit, but also increases size in the position more than the vertical spread. See the 6/1/2016 market outlook for an explanation of the adjustments.
The market is essentially unchanged and the position is still healthy. I believe there is a mispricing in one of the EOD options that is showing the position with a small open loss. In reality, the trade is probalby more around break even.
We’ll be looking for an opportunity to add and/or sell a vertical spread sometime in the next 7-10 days.
The trade is healthy.
Day of entry, not much to say yet.