Stock / Symbol: PowerShares QQQ / QQQ
Option Strategy: [private_monthly]double calendar[/private_monthly]
Price at trade entry: $68.25
Price at this adjustment: $65
Current Position:[private_monthly]
Long 4 QQQ Dec12 69 calls
Short -4 QQQ Nov12 69 calls
Long 4 QQQ Dec12 66 puts
Short -4 QQQ Nov12 66 puts
Reasoning: With QQQ touching our downside stop, we're going to adjust the trade here by [/private_monthly]taking off the current double calendar and replacing it with a tripple calendar. This adjustment puts us back into the current deviation range of 62 - 68 and has a delta 5.87, a positive theta of 8.27 and a positive vega of 41.[/private_monthly] The revised stops are 62 and 68.
Trade Adjustment Details:[private_monthly]
STC 4 QQQ Dec12 69 calls
BTC -4 QQQ Nov12 69 calls
STC 4 QQQ Dec12 66 puts
BTC -4 QQQ Nov12 66 puts
for a min net credit of $1.00 per contract (day order, limit order). The mid is currently at $1.06.
Then,
BTO 4 QQQ Dec12 67 calls
STO -4 QQQ Nov12 67 calls
BTO 4 QQQ Dec12 63 puts
STO -4 QQQ Nov12 63 puts
for a max net debit of $1.30 per contract (day order, limit order). The mid is currently at $1.24, so try to get filled at or just above the mid.
Then,
BTO 2 QQQ Dec12 65 calls
STO -2 QQQ Nov12 65 calls
for a max net debit of $0.70 per contract (day order, limit order). The mid is currently at $0.65, so try to get filled at or just above the mid.
Max Risk: $625 (adjusted up from $500)
Max Reward: $215 or 34% between $63 and $67 by Nov 16
Profit Range: $62.5 to $67.75 by Nov 16
Suggested Upside stop: @ $68
Suggested Downside stop: @ $62
[/private_monthly]
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