Weekly Trade Update - Week 22

Hi Steemians,

last week I posted no trade updates, since I was on a much needed vacation in Bulgaria.
We definitely had a great time.

But it is also great to be back in the trading word.

So here are my weekly trade updates for August 31st, 2018.
I already closed a bunch of positions yesterday and opened new ones.
But there are also September positions left.

Let's have a look at my portfolio.

GLD Short Straddle in October

source:tastyworks

I collected $3.42 for this straddle.
My profit target, as always for short straddles, is 25% of max profit (86 cents).
So I'm going to close this position when it trades for $2.56 or at 21 DTE.
At the moment this position is up 9 cents ($9 per one lot)

October Short Straddle in TLT

source:tastyworks

I collected $3.11 for this straddle.
My profit target, as always for short straddles, is 25% of max profit (78 cents).
So I'm going to close this position when it trades for $2.33 or at 21 DTE.
At the moment this position is down 2 cents ($2 per one lot)

October Straddle in FXE

source:tastyworks

I collected $2.43 for this straddle.
My profit target, as always for short straddles, is 25% of max profit (61 cents).
So I'm going to close this position when it trades for $1.82 or at 21 DTE.
At the moment this position is down 10 cents ($10 per one lot)

October Straddle in XLE

source:tastyworks

I collected $3.53 for this straddle.
My profit target, as always for short straddles, is 25% of max profit (88 cents).
So I'm going to close this position when it trades for $2.65 or at 21 DTE.
At the moment this position is down 3 cents ($3 per one lot)

October 30 Delta Strangle in IWM

source:tastyworks
I collected $3.30 for this strangle.
My profit target, as always for short strangles, is 50% of max profit ($1.65 cents).
So I'm going to close this position when it trades for 1.65 cents or at 21 DTE.
At the moment this position is up 4 cents ($4 per one lot)

QQQ Broken Wing Call Butterfly:

source:tastyworks

This is a huge problem child.
I collected $2.31 for this trade, so at the moment this BWB is down $5.05 ($505 per one lot).
We are at the 21 DTE threshold, so I have to do something.
First I sold the imbedded long call spread and the long 191 call for a credit of $4.51

source:tastyworks

Now I still have one September 175 short call on, which I roll out to October for a net credit of 88 cents.

source:tastyworks

Now I'm short the itm naked 175 call in October.
I collected $2.31 for the sale of the original BWB, today I collected $4.51 for the sale of the long call spread and the long otm call and I collected 88 cents for the roll.
So my overall credit for this short call is $7.70.
At the moment this short call is trading for $12.84.
So I'm down $5.13 ($513 per one lot) on this position.

source:tastyworks

Why am I keeping this loser you might ask.
Well, first I like to keep short deltas as a hedge against my short vega risk and as long as I can roll it for a credit, I will roll and lower my basis on every roll.
But there is another reason.
Let's go back in time to the first trading day of 2018.
On this day the options market was expecting for a one standard deviation move for QQQ for the whole year 132 to the downside and 185 to the upside.
So we are already above the upside of a one standard deviation move after 8 month.
Most of the time markets stay well inside a one standard deviation move.
So we probably see some downside or at least not much more upside for the rest of the year.
That's why I stay with this itm short call.

Broken Wing Butterfly in SPY

source:tastyworks

This is also huge problem child.
I collected $2.19 for this BWB.
My profit target on this trade is 25% of max profit ($1.05).
So I'm going to close this trade when I can close it for a debit of $1.14.
At the moment this position is down $3.99 ($399 per one lot).
I'm going to wait until Monday and then I will do the same roll as in QQQ.


Have a great weekend,
Stephan Haller


Legal disclaimer: These are not trade recommendations. Options involve risk and are not suitable for all investors. The trades shown above are for educational purpose only.