Stock / Symbol: SPDR DOW Jones Industrial Avg ETF / DIA
Option Strategy: [private_monthly]double calendar[/private_monthly]
Price at trade post: $140.20
Reasoning: I'm putting on a [private_monthly]double calendar here on DIA. [/private_monthly]This is a delta neutral trade with a delta of 3.8, a positive theta of 4 and a positive vega of 65. With volatility very low, I'm using a [private_monthly]calendar [/private_monthly]which will benefit should volatility increase. If DIA either trades up to $143 or down to $136.50, we'll either stop out of the trade or adjust by [private_monthly]adding another calendar. [/private_monthly]
Trade Details:[private_monthly]
BTO 4 DIA Apr13 142 calls
STO -4 DIA Mar13 142 calls
BTO 4 DIA Apr13 138 puts
STO -4 DIA Mar13 138 puts
for a max net debit of $1.85 per contract (day order, limit order). The mid is currently at $1.77. If not filled today, it's ok to try again tomorrow.
Requirements:
Cost/Proceeds $720
Option Requirement $0
Total Requirements $700
Estimated Commission $24
Max Risk: $720
Max Reward: $150 or 20% (at current volatility level) between $138 and $142 by Mar 15
Profit Range: 136.50 and $142.90 by Mar 15
Suggested Upside stop: @ $143
Suggested Downside stop: @ $136.50
[/private_monthly]
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