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P/L diagram


At what point would you close that position? 7/9/17
The DirectorThe Director
1/2 time or 25% max profit 7/9/17
The DirectorThe Director
For this trade that would be at $1000 profit or in 3 weeks, whichever comes first 7/9/17
Why not sell the AUG 88 - 89 call spread? Not a whole of profit in it but relatively low risk. I have been looking at shorting HYG since I was stopped out my TLT long position at 127 had a nice run from 118. I should have reversed to a TLT short but I really didn't see interest rates jumping so much. It's possible that rates already made their move and now go flat or decline as deflation is lurking in the background. 7/9/17
The DirectorThe Director
Sure. There are many possible ways you can take advantage of a bearish opinion. The voltality is above 25 percentile so a butterfly may take advantage of this better and you have the avantage of positive theta... time is ticking away to your advantage 7/9/17
The DirectorThe Director
In extremes (IVP<5), a calendar or diagonal is better as it makes money with a rise in volatility while a butterfly (or straddle/strangle) is better in high IVP (money with decreasing volatility usually) 7/9/17