Stock / Symbol: Square / SQ
Strategy: Broken Wing Short Butterfly Put Spread / Bear Put Spread
Trade entry date / price: 23 Sep 2021 / $265
Price at this post: $243.01
Update / Reasoning: I'm looking to close out this trade for around a 10% return. With SQ down significantly today (-5.8% at the moment), this trade is back to around break even. Currently, the net position Greeks are: -4.2 Delta, -0.1 Gamma, 1.5 Theta and -1.1 Vega. While I'm waiting for the trade to close, I'm setting an upside stop @ $252.90. If the upside stop is hit, I will either just exit the trade for a small loss or adjust.
Trade Exit Order:
STC 1 SQ 15Oct21 257.50 put
BTC 1 SQ 15Oct21 255 put
For a min net credit of $2.00 per contract (GTC order, limit order). The mid is currently at a credit of $1.80. I don't expect this order to fill until the week of Oct 11 - 15, unless SQ drops below $231 in the near term.
Analysis:
Adjusted Max Risk: $175 (down from $400)
Max Reward: $70 or 40% with SQ at/under $255 on Oct 15th
Profit Range: SQ at/under $255 on Oct 15th
Estimated Commission (round trip): $5.20
Upside stop: $252.90
