Hello Investors,
Today we discussed a few key points regarding a favorite trading strategy, the butterfly. Specifically that the higher the volatility in the stock, the lower the risk and higher reward in the butterfly. We are entering into a high volatility butterfly in United Airlines (UAL) with a nice risk/reward accordingly.
In addition, we continue to generate income on existing positions and use the income to buy more shares.
We sold a “short strangle” in INDA. An obligation to buy more shares at 21/share or sell the current shares at 30/share. This paid us a credit +0.45 income. We used the income to buy 2 more shares of stock at current levels.
We have a pending order to sell a covered call in TMUS. We are attempting to sell the May 15th – 100 strike calls for +0.74 credit. This is a “good ’til canceled” order.
We have a pending order to buy 2 contracts of the UAL May 15th 33/39/45 call butterfly referenced previously. We raise our price to 0.90 debit and will leave it as a “day order” only. If we don’t get filled today then the order will cancel away and we will reassess and send an update if we want to try again.
We will have a short meeting on this Friday (April monthly options expiration). To review and adjust positions into expiration as needed.
Have a great week!