Stock / Symbol: VanEck Semiconductor ETF / SMH
Option Strategy: Unbalanced Call Butterfly
Trade entry date / price: 02 May 2024 / $208.50
Price at this post: $235
Update: With the positions' options expiring tomorrow, I'm closing out the trade for a moderate loss today to avoid assignment of the deep ITM short calls. I was horribly wrong about the direction of the underlying, but thanks to the mid-trade adjustment I made, the loss is just 34% of the initial position's max loss of $200.
Trade Exit Order:
STC 1 SMH 17May24 195 call
BTC 1 SMH 17May24 200 call
for a min net credit of $4.98 per contract (day order, limit order). I was filled at $4.98
then,
BTC 2 SMH 17May24 200 calls
STC 2 SMH 17May24 205 calls
for a max net debit of $5.05 per contract (day order, limit order). I was filled at $5.05
then,
BTC 1 SMH 17May24 225 put
STC 1 SMH 17May24 222.50 put
For a max net debit of $0.02 per contract (day order, limit order). I was filled at $0.02.
Analysis:
Max Adjusted Risk: $304
Max Reward: $675 or 222% with SMH trading right at $200 on May 17th
Profit Range: SMH at/under $203.50 by May 17th
Commission (round trip): $10.40
Realized Profit / Loss: ($68) or -22% (pre commission)
