Around 11:30 central today, AAPL was at 199.66 -7.82 for the day. Friday was down pretty good also because of earnings. Today, I took a neutral to Bullish long term stance with AAPL and did a put credit spread instead of a very expensive cash secured put ( simply a short put). I sold the Nov 23 190 Puts and didn’t like the high margins of a short put, so I bought a 180 Put against it. I did the credit spread for 1.60 credit. A little less than 3 hours later, I bought back the spread for 1.16 Debit with AAPL near 201.5 at 2:17 pm central, a return of over 5%. My plan was to take 10%, that would mean buying back the spread for .80 Debit. But my impulsiveness had a hard time turning down over 5% in less than 3 hours!
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
(The below trade was put on earlier today in a webinar with ally invest.) Today around 11:30 am central, we put on an Iron Condor with SPX around 2760 and VIX just under 22. The trade was in the Oct 26 Expiration. B 1 2860 C, S 1 2850 C, S 1 2630 P, B 1 2620 P, total credit 2.20 , margin/risk $780. Plan is to take off for about 8% profit or 1.55 Debit. If spread goes over $3 get out for 10% loss. Dan Sheridan email@example.com
(The below trade was put on earlier today in a webinar with ally invest.) B 1 Oct 17 2930 C, S 3 Oct 17 2940 C, B 1 Oct 17 2950 C, 1.80 Credit, Risk or Margin $820. Max $180 credit on downside or 21% on Capital. Plan on downside would be to buy back the spread at 1.20 debit and make around 7%. If the SPX goes up to 2905, I might look to buy the 2930-2940 Call spread in the Oct 17 Expiration , to reduce my short Deltas.
Live RUT Calendar I put on during Sheridan TV today with RUT around 1715. B 1 Oct 5 1715 C, S 1 Sep 21 1715 C, 8.95 Debit. Look for 6% in next 1-2 days, sell out for 9.50 Credit. If spread goes under 8.30,down 8% get out. Thanks, Dan Sheridan
Spec Directional Trade with AMZN at $1961 -33. Bullish Butterfly looking for a slight rebound over next week. Sep 14 Expiration. Buy 1 1985 C, S 2 2000 C, B 1 2015 C, 1.20 Debit. Looking to sell this out for 1.60 Credit or higher. Income Trade in SPX. 15 day Butterfly in the Sep 15 Weeklys. B 1 2840 C, S 2 2880 C, B 1 2915 C, 13.15 Debit. Looking to sell out the spread for 13.95 credit or higher over the next 1-3 Trading Days. Dan Sheridan
#1 GLD: Sept 21 Expiration, Bullish Butterfly. B 1 114 C, S 2 117 C, B 1 120 C .82 Debit. Spread trading around .88-.89 area today with GLD trading higher at 115.06 +.54. #2 NFLX: Aug 10 Expiration, Bullish Butterfly. B 1 342.5 C, S 2 352.5 C, B 1 362.5 C, 2.35 Debit. Spread Trading about .30 lower today with NFLX at 340.70 -3.78. #3 SPX: Short Term Butterfly. Aug 10 Expiration. B 1 2800 C, S 2 2830 C, B 1 2860 C, 11.80 Debit. Spread trading around the same price as what I paid with SPX today at 2836 +9. Watch yesterdays episode below.
AAPL Iron Condor for Earnings in the Aug 3 Expiration S 1 Aug 3 200 C, B 1 Aug 3 205 C, S 1 Aug 3 180 P, B 1 Aug 3 175 P, 1.06 Credit With AAPL + 8.61 at 198.90 , the Iron Condor is trading at .99, we are up a small bit. We are about 7 points from the short call strike of 200 with today, Thursday , and Friday till this trade expires. The position Greeks for 1 contract are -32 Deltas short and 15 Theta and -4 Vega. The high today is 199.26. If we break 200, the short strike, I would adjust the trade by buying the 190/195 Call spread to narrow the width of the call side 5 points and reduce the short deltas. Bottom Line: Earnings are out , we are up a small amount of money and have a plan if the short strike is threatened. AAPL Bearish Butterfly for Earnings in the Aug 10 Expiration B 1 195 P, S 2 185 P, B 1 175 P, 2.60 Debit. With AAPL up 8.61 at 198.60, we were wrong on this speculative Butterfly and sold it out today for 1.29 […]
AMZN Double Butterfly in Jul 27 Expiration. Our short strikes in the Butterflies were 1910 in the Calls and 1710 in the Puts. AMZN opened at 1876, hit a high of 1880 , and then dropped off to 1849 area. At the opening, I sold out the Call Butterfly for .36. The total cost of the Butterfly was .75. Net we lost $36 for every 1 Double Butterfly. Not bad for a cheap shot. The move in AMZN was less than the expected range of $100 , which is where we structured the short strikes of the Butterfly. Lesson Learned: Next Earnings , I will probably do this strategy , but I will pick an expiration 1-2 weeks past the earnings date to structure the Fly. Reason? It’s very rewarding but difficult to structure a Double Butterfly in the expiration that is the same week as the Earnings Release date. Doing a Double Butterfly in an expiration that is the same week as the Earnings release date requires almost precise accuracy when picking the short strikes, very difficult. It’s like making a Bullseye. Giving us an extra 1-2 weeks next time should provide just the right tweak to this very […]
#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!
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 orgasmove retardery 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.
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