Stock / Symbol: SPDR DOW Jones Industrial Avg ETF / DIA
Option Strategy: double calendar
Trade entry date / price: Sep 13 / $153.60
Price at this post: $153.88
Current Position:[private_monthly]
Long 2 Nov13 148 puts
at an effective cost of $1.20 (factoring in profit from closing the call calendar + short puts)
Reasoning: After closing the call calendar and buying back the short puts last week, we're up a little bit on this trade. I was expecting a pullback, down to 151, but today's action has me concerned that the pullback might be done.
Adjustment: I'm going to attempt to sell the Sep Week4 puts here. This adjustment will adjust our position Greeks to: -47.6 delta; -4.3 theta, and 35 vega. I'm raising the downside stop to [private_monthly]$152 and setting the upside stop to $154.60. If we're not filled today, we may stop out at $154.60 or look to sell the short puts with DIA trading down.[/private_monthly]
Trade Adjustment Details:[private_monthly]
STO -2 DIA SepWk4 152 puts
for a min credit of $0.15 per contract (day order, limit order) The mid is currently at $0.14
[/private_monthly]
Max Risk: $1,045 to the downside / $210 to the upside (originally $510 at trade entry)
Max Reward: $120 or 11% (at current volatility level) at $152 by Sep 27
Profit Range: 151.75 to 152.50 by Sep 27
Suggested Upside stop: [private_monthly]@ $154.60
Suggested Downside stop: @ $152
[/private_monthly]
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