Hello Investors,
Another quick trade update today. We closed our very short-term May 22nd (weekly) SPY short call position. We will enter into an August (monthly) SPY put butterfly with the 290/260/230 strikes. We included a video to describe this trade and our outlook. In addition, we have made a couple other tweaks as follows:
New Trade:
Buy to open: SPY August 21st (monthly) 290.00 strike puts (ratio of 1)
Sell to open: SPY August 21st (monthly) 260.00 strike puts (ratio of 2)
Buy to open: SPY August 21st (monthly) 230.00 strike puts (ratio of 1)
Limit debit: 3.50
Max risk = 3.50; Max reward = 26.50
Trade Exit:
Buy to close: XLE June 19th (monthly) 38.21 strike puts
Sell to close: XLE June 19th (monthly) 36.21 strike puts
Limit debit: 0.59
This will lock-in a profit and reduce our bullish exposure.
Trade Exit:
Sell: BAC 100 shares
We attempted to “roll-out” this short put hedge last week (Friday) and the order didn’t get filled. The stock has since jumped higher and we will exit the position today. We received a credit of +0.70 for the puts so this hedge worked out to a loss of -0.20 overall. However, when including what we made in the calls, the total income was positive on our BAC positions for May.
The video of our SPY butterfly is here:
Have a great weekend.