Entered a new trade today with a little different setup. The volatility skew is steep right now, which makes these trades more difficult to manage to the upside. I’m moving the middle strike (short puts) closer to the money which should help prevent the right leg getting hurt too much if the market continues up. Of course the trade-off will be a quicker exit on a move down in the market.
Here is Trade 4 which is another SPX BWB with strikes at 2590-2555-2505. The expiration is Dec 1st, 45 days away.
Quick update on Trade 3 – Currently up 1.1% after 11 days in the trade. The t+0 line is starting to slope too much at the current market, which means I may need to start working an exit soon. It’s also why I’ve entered a new trade with a slightly different setup – so overall, my portfolio has a flatter t+0 line.
Here is the 7 day step view of Trade 3 and you can see that the profit lines are now sloped where the middle, vertical line (market price) is at.
Still plenty of opportunity to make more $ on this trade, but I’ll be watching closely in case I hit my exit point.