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.
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
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 firstname.lastname@example.org
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 email@example.com
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 firstname.lastname@example.org
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 email@example.com
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, […]
This week, the SPX has been between 2700 and 2723 if you just look at the closing prices of SPX this week and today. Big Deal? No. Twenty three point range in a $2700 vehicle over the last 4 days? No big deal. Let’s look closer. Monday and Wednesday had huge intra-day price ranges, that’s a big deal if you have positions on. Monday had a 44 point range intra-day from 2698 to 2742 and closed at 2717. Wednesday this week had a range of 2699 to 2746 and closed at about 2700. When you see intra day ranges between 45-55, that’s huge. Those are the types of ranges you saw at the beginning of the correction in early February. That makes trading short term trades very difficult, especially if the IV is rising. With the VIX at about 18.39 as I speak, I am a little more comfortable with putting on short term , short Vega strategies like Butterflies and Iron Condors , even with intra-day ranges exploding, why? Because I am now getting some compensation for the volatility in terms of farther ranges in my Iron Condors and cheaper prices and wider Break even points in my […]
SPX 2770.59 at 12:15 central. Jun 29 Expiration. 11 Day Unbalanced Butterfly B 1 2740 C, S 2 2770 C, B 1 2795 C 9.65 Debit. Margin/Risk $965 Beginning Greeks: Price 2770 Deltas -1.38 Theta 19 Vega -58 Profit target and Max Loss: 8 % Profit and 10% Max Loss of Margin/Risk of $965. Will keep it simple and use no adjustments. Mid Price now is 9.65 and not filled yet but still keeping my bid at 9.65 Debit.
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