Earlier this morning we looked at this trade:
Opening Trade
Buy SPY Aug 6 Weekly 110 straddle for $2.88
Sell SPY Jul 30 Weekly 109/111 strangle @$0.32
Total Debit: $2.56
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The updated Options Tab is included (click to enlarge).
The strangle is going to expire worthless and now we can just sell the straddle back out.
Closing Trade
Not as good as I had hoped as vol fell off a table in the last hour (boo!).
Sell SPY Aug 6 110 straddle @$2.63. Let the strangle expire worthless (I hope). On a $2.56 cost basis, that's $0.07 profit in one day, or 2.7% (boo!).
I'll look to do more weekly expiration trade analysis next week as well. This is trade analysis, not a recommendation.
Legal Stuff:
http://www.livevolpro.com/help/disclaimer_legal.html
small loss no biggie at all. These weeklies are a new beast, the vols really got sucked out of those aug6 options.... summer friday.
ReplyDeletevol just completely disappeared in the last hour.
ReplyDeleteDespite the modest outcome, I enjoyed the idea creation! Keep it coming!
ReplyDeletethanks; a small win is better than a loss, so that's good.
ReplyDeleteWhat were your transaction costs ?
ReplyDeleteless than $0.07 for sure; we clear through ML as market makers - when we take a market it's $0.0026 per contract.
ReplyDeletenice, i pay $9.99 per trade and $0.75 per contract at TD :)
ReplyDeleteyikes. so a $0.07 win turns into $0.055 and then take away $9.99 twice?
ReplyDeleteyes
ReplyDelete.0026 for taking, so any difference in what we pay and that, is all profits to our broker/prop firm huh? I think its time for me to renegociate:)
ReplyDeleteretail is tough man...
ReplyDeleteOphir, Why are option's commissions so much higher than stock exectuions for retail investors? What are the best option trading venues in your opinion from an ideal front-end, analysis, and cost perspective? Thanks so much for your great analysis and insight!
ReplyDeleteHi Eavn,
ReplyDeleteI don't have any good answers for you unfortunately. I believe ibkr is supposed to be one of the best for commissions, but their customer service in my experience is really bad... This might be a better question for anyone else to answer.
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ReplyDeleteLivevol™ provides a cutting edge front-end application called Livevol™ Pro. Designed by some of the option industry's most successful traders, Livevol™ Pro is built to be the new standard in option trading front-ends.
ReplyDelete