Dan just closed his Monday SPX Double Calendar trade for a 12.40 Credit on Thursday morning at 8:35am Central Time. He closed his trade for a 12% profit.
Dan put the below trade on about an hour ago, live, in a webinar for Ally Invest.
Trade: With SPX around 2554 at about 11:40 central, bought 1 Nov 10 2570 Call and bought 1 Nov 10 2530 Put, and sold 1 Oct 27 2570 Call and sold 1 Oct 27 2530 Put. Total debit for this live trade, 11.05 . Selling Expiration that expires in 11 Days and buying the expiration that expires in 25 days.
Dan’s 4 Step Risk Management Plan for this trade:
Step 1– Set up: Details are up above next to Trade.
Step 2– Risk Management: 8% Profit and 10% Max Loss on risk capital of $1105. Will have in order to take off for $11.90 Credit , a profit of about 8%. If spread I paid $11.05 for goes under $9.50 , I would get out of the trade .
Note: Beginner Traders would only deal with Step 1 and 2. Once you have done 5-6 Double Calendars and understand them, then I would deal with Step 3 and 4.
Step 3- When to Adjust? Upside: Short Call strike of 2570 . Downside: Short Put Strike plus 5 points or 2535.
Step 4- How to Adjust? Upside: Take off Put Calendar. Downside: Take off Call Calendar.
Took off Mondays Live Butterfly today for a profit of around 5% in 3 Days! (You can reference the trade from Monday’s blog using the link below.)
Took off the Butterfly for less than my goal of 8-10 % because I am concerned with the narrow range in SPX last 5 trading days and am quick to get out of my short Vega trades a bit early when VIX is so low, today it is at 9.76! We bought the Butterfly Monday for 12.15 Debit and sold it out today for 12.70 Credit . The Trade was in the Oct 27 expiration. The trade was B 1 2520 C , S 2 2550 C , B 1 2575 C , $12.15 Debit.