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 I pick a speculative play and I will be careful not to trade too large. If one thinks the range will be between 359 and 426, I would choose some type of range bound strategy like Iron Condors or Butterfly. If I think the range will be outside 359 and 426, I will pick a more speculative strategy like a Long Straddle or Strangle. A 3rd choice is to take a directional opinion up or down and use a strategy like a long vertical or directional Butterfly to express that directional opinion. I will choose a directional bullish Butterfly on the upside that would benefit from IV decreasing on the upside, a price increase that could help me, if move doesn’t go too far through my short strike, and if I’m wrong , it’s a cheap shot. Why am I going to take a bullish outlook? This is pure speculative and I am going for a home-run with a small amount of capital I have.