#1 AMZN Earnings Double Butterfly in Jul 27 Expiration B 1 1900 C, S 2 1910 C, B 1 1920 C .35 Debit B 1 1720 P, S 2 1710 P, B 1 1700 P .32 Debit #2 FB Bullish Butterfly Aug 3 Expiration B 1 175 C, S 2 180 C, B 1 185 C .87 Debit #3 SPX Butterfly Aug 10 Expiration (Didn’t get filled) B 1 2810 C, S 2 2840 C, B 1 2865 C, 9.70 Debit. #4 Adjustment for Tuesday’s Live Calendar in SPX B 1 Aug 20 2940 C 1.20 (Decided to just buy a cheap call versus re-positioning the Calendar like I talked about) See video below!
About Dan Sheridan
Dan Sheridan traded in the pits of the CBOE for over twenty years and is still a weekly educator at the Options Institute in Chicago. He opened Sheridan Options Mentoring in 2007, and has since educated thousands of retail traders by relying on the methodologies and strategies that were crafted by current market makers.
Entries by Dan Sheridan
3 Trades from Yesterday’s Show that I put on Live # 1 TSLA Short Term Bullish Butterfly B 1 Jul 27 300 C, S 2 Jul 27 305 C, B 1 Jul 27 310 C, .65 Debit. Looking for TSLA to be near the short strike of 305 by Thursday. Today TSLA is at 299.62 +2.19, moving in the right direction. The price has already moved up near .75, have order in now to sell for .95 credit. #2 NFLX Short Term Bullish Butterfly B 1 Jul 27 360 C, S 2 Jul 27 365 C, B 1 Jul 27 370 C, .72 Debit. Spread trading around .70 with NFLX down a little over $1, at 356. We need NFLX to have an up day tomorrow and move toward 360 area. #3 SPX Calendar With SPX around 2815 yesterday, we did a short term Calendar. We bought 1 Aug 20 2815 C and sold 1 Aug 3 Expiration 2815 C for Debit of 9.65. The Spread is trading a little lower today, around 9.45, with SPX around 2819. Nothing much going on with this today.
AMZN High Octane 1 Day Iron Butterfly with AMZN near $ 1815. B 1 Jul 20 1815 C, S 1 Jul 20 1805 C, S 1 Jul 20 1805 P, B1 Jul 20 1805 P, 8.15 Credit. Risk $185. Looking to take this trade off for a profit in the first 1-2 hours of trading tomorrow as long as AMZN is somewhere between 1785 and 1840. Will keep you posted with what I do in the AM tomorrow. TSLA 1 Week Iron Condor with stock near $320 Jul 27 Expiration. 335-340 call spread and 305-310 Put spread. 2.29 Credit and I didn’t get filled . If I try this again tomorrow, will let you know. SPX 15 Day Butterfly Aug 3 Expiration. B 1 2780 C, S 2 2810 C, B 1 2835 C, 9.70 Debit. Not filled yet, if I get on tomorrow will let you know. *** TRADE UPDATE AS OF 9:50am 7/20/2018*** Yesterday we did an 1 Day Iron Butterfly with the short strike of 1815 for an 8.10 Credit. Today, with AMZN at 1831 +18, the spread is trading at 8.40-8.70 area and I took it off for 8.40, a small loss.
Earnings in NFLX are after the close today. NFLX stock is down 7% from its highs of $423 on Jun 21, about 3 ½ weeks ago. The Projected price move for earnings on the TD Ameritrade Platform is around $30, projecting about a 7% potential move in the stock. The July 20 At the Money Straddle for this week is around $34, projecting a potential move of about 8.6% up or down. Bottom line , the projected moves are between roughly 7 and 8 ½ %. What range does that project for where NFLX could possibly be tomorrow in the AM when the stock opens? The answer using the current price of $393 is: $359 to $426. There is a high Probability tomorrow morning, NFLX will be somewhere between $359 and $426, up or down about 8 ½%. Now to today, what would I do? Do I know what will happen tomorrow? Of course I don’t know what will happen tomorrow, either do you. But the question to answer is this: Do I think NFLX will be between 359 and 426 or do I think it will be outside this range. Either answer is still going to make the strategy […]
TSLA is trading at 312 +3 for today. I’m looking for a cheap shot on the upside. 3 weeks ago, TSLA traded $373. Today it has bounced a little but is still trading 16% lower than it did 3 weeks ago. If I am looking for more of a bounce over the next 2 weeks, here is a trade in the July 20 Expiration , I did today. Trade: Buy 1 320 Call, Sell 2 330 Call, Buy 1 340 Call, 1.12 Debit. July 20 Expiration. Looking for TSLA to be between 317 and 345 over the next 7-8 days. This is an 11 Day trade. My profit Target is around 40% and look to get out of this trade in 7-9 Days. I paid 1.12 Debit and would like to sell it out for around 1.55 Credit. If TSLA trades under $300 in the next 7 Days, I probably would get out. Dan Sheridan email@example.com
Monday, Jul 2 of this week, TSLA traded intraday at 364, it closed at $335. Today, Friday July 6, TSLA is trading at $308, down 15% or 56 points from Monday’s Highs! You can check the proposed reasons for this on the web or a multitude of places, so I won’t focus on the Pundits opinions. What I will focus on is this: If I think TSLA will recover some of the 56 points it lost this week , maybe over the next 2-3 weeks, how can I get long? Better yet, how can I get long without getting my face ripped off if I’m wrong and TSLA goes down more? I have many choices to get long TSLA , but will focus on 3 popular ones. I can buy a long call or a long Vertical, 2 popular choices. Both have decent risk if I’m wrong. My third choice involves starting with a long vertical and then selling a short vertical against it where the short strike of both spreads is the same. What is this called? A Butterfly Trade. This is much cheaper dollar wise than a long call or vertical. Can this Butterfly trade make as much […]
July 5 Live Trades from SOM TV Show COST Iron Condor. Jul 20 Expiration. S 1 215 C, B 1 220 C, S 1 200 P, B 1 195 P, .99 Credit. With COST currently trading at 208 -1, the Iron Condor is trading at .89. Nothing to do now. Position Greeks at 208.23: Deltas -4, Gamma -3.47, Theta 5.71, Vega -10. TSLA Bullish Butterfly. July 20 Expiration. B 1 320 C, S 2 325 C, B 1 330 C, .31 Debit. With TSLA at 307 -2 today, the spread is trading at around .30- 35 range , nothing to do right now. Dan firstname.lastname@example.org
In the previous blog post I put on a SPX Iron Condor I just took off Mondays High Octane short term Iron Condor for a 12% profit in 3 days. The trade was in the July 6 expiration. Buy 1 JUL 6 2750 C, Sell 1 JUL 6 2745 Call, Sell 1 JUL 6 2660 Put, B 1 JUL 6 2655 Put. I sold the Iron Condor Monday for 1.35 Credit, and bought it back today for .90 debit. Dan Sheridan email@example.com
The below trade was discussed earlier today in a webinar with Ally Invest. B 1 JUL 6 2750 C, S 1 JUL 6 2745 C, S 1 JUL 6 2660 P, B 1 JUL 6 2655 P, 1.35 Credit. Margin or Risk per 1 contract is $365. I have an order in now for 1.35 credit at 12:27 pm central with SPX at 2704 -14. Not filled yet. Mid Price Range is between 1.25 and 1.35. My Profit Target is 15 % of my Max Risk of 365 and My Max Risk is 20% of $365. Would do smaller size than an 18 Day or 45 Day Iron Condor. There is more price Risk as you get closer to Duration and this trade expires this Friday in 4 Days! The beginning Greeks are : Deltas -.76, Gamma -.15, Theta 24, Vega -18. Dan Sheridan firstname.lastname@example.org
Now that I have your attention, why the dramatic title? Let’s start with a discussion of what covered writes are , then lets get into a discussion on a better alternative. Covered Write example: Buy 100 shares XYZ at $90 and sell 1 August 95 Call at $1. Your generally buying stock and selling an out-of-the money call against the long stock. Why would someone do this versus just buying the stock? Extra Income. As long as the stock doesn’t go up too much over a designated duration, you can make money on the stock appreciating and also some additional income from the call your selling , as long as the stock doesn’t appreciate past the short strike. What’s the problem with this trade? Cost! In a retirement account, you would have to put up the full value of the stock minus the premium of the short call. In this case, you would pay $9000 for 100 shares of stock minus the $100 premium from the short call, or $8900. What is a reasonable monthly yield on this type of strategy? About 1%. Is that bad? It’s not horrible, but for the risk and capital you have to put up, […]
558 Revere Ave.
Westmont, IL 60559
The information contained on this website is for educational purposes only: no representation is being made that the use of any trading strategy or trading methodology will generate guaranteed profits. Past performance is not necessarily indicative of future results. There is substantial risk of loss associated with trading options. Only risk capital should be used to trade. Trading options is not suitable for everyone. You must be aware of the risks and be willing to accept them in order to invest in these markets. Please review the document- http://somurl.com/KnowYourRisk before trading options.