Bearish Natural gas spread

UNG, the etf for natural gas is trading near highs not seen since the middle of last winter. A short term bearish butterfly looks interesting  here to take advantage of a pullback that may be coming. As I write this, UNG is trading around $26.60. I am looking to place the trade below at a debit of around $1.30 per contract. Looking to close the trade at either a 10% profit or a 10% loss. Looking for UNG to decline to the $25 to $26 area in the short term.

Nov 2nd expiration:

Buy one 28 put

Sell two 25 puts

Buy one 22 put

 

Mark Fenton

mark@sheridanmentoring.com

Live Iron Condor in SPX

(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

dan@sheridanmentoring.com

Live Trade Today in SPX- Ratio Call Fly

(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 trade for today

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

Live Trades from Todays SOM TV Episode

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

SheridanTV Live Trades from Thursday Aug 2

#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.

 

SOM TV Trades from Tuesday Jul 31

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 Credit. Wanted to cut the losses , we were wrong. For this butterfly to make money, we need it to go towards the short strike by next week and the Aug 10 Expiration. That would be 185 in AAPL by next week or near that price, and frankly, doesn’t look like that probably will happen. If I stayed in the Butterfly hoping for a decline in the next week, I could watch the 2.60 debit go to zero. I basically pared the loss in half.

SPOT  Iron Condor

Iron Condor in Spotify Aug 10 Expiration.  S 1  190 C, B 1  195 C,  S 1  180 P, B 1  175 P,  2.55 Credit. Currently trading at 2.45 with SPOT at 182.34, not much going on.

 

BIDU Earnings Trade

BIDU has their earnings call tonight and one interesting trade idea if you are bullish  is to put on an out of the money call fly to take advantage of a strong bullish move. Below is an example taking into consideration the market maker expected move of $16:

August 3rd expiration

Buy one 260 strike call

Sell two 270 strike calls

Buy one 280 strike call

Right now the debit for the trade is around $1.50 per spread.

Plan to exit tomorrow or later this week before Friday expiration. If this trade  doesn’t work you will like lose the entire cost of the trade, but if it does work you could make 20% to 50% or more.

Mark Fenton

mark@sheridanmentoring.com

Update for AMZN and FB trades from SOM TV from Yesterday

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 low cost and potentially high reward strategy!

FB: Bullish Butterfly in Aug 3 Expiration: B 1  175 C, S 2  180 C, B 1  185 C,  .87 Debit.  Today, with FB at 177.70  + 1.42. Just Sold out the Butterfly for 1.25 Credit, 43% yield in 1 day, excluding commissions!

 

Dan Sheridan

dan@sheridanmentoring.com

Live trades from today’s SheridanTV

#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!