Hello Investors,
The class today and changes we made to the portfolio are probably counterintuitive. We are exiting volatility trades going into what could be a big volatility event with both the Elections and Fed meeting this week. In addition, we have a pending order to buy a put spread in the VIX only if we can get in at our price. The thought process and analysis was described in class and the recording is included below.
Took profits in our VIX call butterfly as follows:
Sell to close: VIX Nov 20th (monthly) 20.00 strike call (ratio of 1)
Buy to close: VIX Nov 20th (monthly) 30.00 strike call (ratio of 2)
Sell to close: VIX Nov 20th (monthly) 40.00 strike call (ratio of 1)
Credit: 1.06 – order has been filled
This locked-in a profit of +0.48 or +$48.00 per spread
Took profits in our SPY put butterfly as follows:
Sell to close: SPY March 21st (monthly) 560.00 strike put (ratio of 1)
Buy to close: SPY March 21st (monthly) 540.00 strike put (ratio of 2)
Sell to close: SPY March 21st (monthly) 520.00 strike put (ratio of 1)
Credit: 1.38 – order has been filled
This locked-in a profit of +0.38 or +$38.00 per spread
We have a pending order to get into a bear put spread in VIX, this is a day order only and if not filled it will be canceled.
Buy to open: VIX Nov 20th (monthly) 18.00 strike put
Sell to open: VIX Nov 20th (monthly) 15.00 strike put
Debit: 0.94 – day order only and this is pending (has not filled)
Max risk = 0.94 or $94.00 per spread
Max reward = 2.06 or $206.00 per spread
Have a great week!