At what point would you close that position?
1/2 time or 25% max profit
For this trade that would be at $1000 profit or in 3 weeks, whichever comes first
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.
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
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)