Stock / Symbol: SPDR DOW Jones Industrial Avg ETF / DIA
Option Strategy: [private_monthly]double calendar[/private_monthly]
Price at trade post: $144.65
Reasoning: Looking to play both sides of this market, I'm putting on a [private_monthly]double calendar here on DIA. [/private_monthly]This is a delta neutral trade with a delta of 3.2, a positive theta of 2.65 and a positive vega of 155. With volatility very low, I'm using a [private_monthly]calendar [/private_monthly]which will benefit should volatility increase. [private_monthly]If DIA trades up over $146, I'll likely take the profits there on the call calendar and then play for a pullback in DIA. If DIA quickly trades down to $142, we'll take profits on the put calendar and then play for a rebound in DIA.[/private_monthly] I'm using weeklies on this trade, giving us the possibility of selling additional calls / puts in 2 weeks time.
Trade Details:[private_monthly]
BTO 5 DIA May13 147 calls
STO -5 DIA MarWk5 147 calls
BTO 5 DIA May13 142 puts
STO -5 DIA MarWk5 142 puts
for a max net debit of $2.70 per contract (day order, limit order). The mid is currently at $2.56. If not filled today, it's ok to try again Monday.
Requirements:
Cost/Proceeds $1299
Option Requirement $0
Total Requirements $1299
Estimated Commission $30
Max Risk: $1299
Max Reward: $150 or 11.5% (at current volatility level) at $142 by Mar 29
Profit Range: 141.50 to 143.25 and at $147 by Mar 29
Suggested Upside stop: @ $147
Suggested Downside stop: @ $141
[/private_monthly]
Non-members, click here for access
