Stock / Symbol: SPDR DOW Jones Industrial Avg ETF / DIA;
Option Strategy: [private_monthly]double calendar[/private_monthly];
Trade entry date / price: Feb 13 / $140.20;
Price at this post: $138.30;
Current Position:[private_monthly]
long 4 DIA Apr13 142 calls
short -4 DIA Mar13 142 calls
long 4 DIA Apr13 138 puts
short -4 DIA Mar13 138 puts
Reasoning: Going to add another put calendar to bring down the trade's delta from 41 to 22. With the additional calendar, our vega will go from 75 to 102, so hopefully volatility will continue to rise. If DIA either trades up to $143 or down to $135, we'll stop out of the trade. [/private_monthly]
Trade Adjustment Details:[private_monthly]
BTO 3 DIA Apr13 135 puts
STO -3 DIA Mar13 135 puts
for a max net debit of $1.15 per contract (day order, limit order). The mid is currently at $1.05.
Max Risk: $1025 (up from $720)
Max Reward: $300 or 29% (at current volatility level) between $135 and $142 by Mar 15
Profit Range: 133.50 and $142.90 by Mar 15
Suggested Upside stop: @ $143
Suggested Downside stop: @ $135
[/private_monthly]
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