SPX Aug5 2016 BWB

Position Spreadsheet With Greeks:

Trade Tracking Spreadsheet (Opens in Google Docs)

Trade Overview and Plan:

The $SPX August 5 2016 BWB is a medium DTE BWB initiated with 51 DTE.  The trade began as two 1940/1990/2030 BWB’s purchased for a 1.00 debit (each) on 6/15/2016.  If SPX continues higher the position will be adjusted by selling verticals to lift the upper wing and/or performing a reverse harvey on the upper long.  If the market trades lower, we’ll either roll lower or close the trade depending on the timing, DTE, and open profit/loss.

The maximum desired loss on the position is under 10% on capital at risk.  The target gain is a 5-10% return on risk with the potential for more if the market environment is favorable.  Depending on the market environment, I may close one of the two flies upon hitting a 4-5% return.

With many of the BWB trades the market can move quite a bit without causing significant pain.  At the same time, the yield on the position will be low if price trends strongly higher away from the body.

Trade Management:

The first management point for the position on the downside is around the upper long strike around 2030.  At that point, we begin to monitor the position more closely with the potential for action.  Trading down to the 1960 area early in the trade would be our signal to roll lower or exit.

Fills (Actual fills from my real money account):

Screen Shot 2016-06-15 at 9.35.53 AM

Trade Images and Comments By Day:


I think there may be a mispricing on the close, but I’m not too worried about the trade either way.



VIX is up in a big way with the rumors about something across the pond.  The position still looks good.



Everything looks okay and there wasn’t much change today.



The market was up today and the trade looks good.



The position is essentially unchanged today and everything looks good.



The market was slightly higher on the day and the trade is fine.



We opened the trade today and there isn’t much to say just yet.  Everything looks good.