Category: Dr. Duke's Blog
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Today's trading in the markets was choppy and went back and forth all day. However, the bulls were able to finish the day with small increases in all of the major indexes. This market has surprising strength. I am expecting it to trade sideways if not slightly downward for a while here, but who knows? That is why it is crucial that you keep your positions properly hedged so that any one day's big move doesn't kill you.

RUT closed at $550.88. I took the opportunity this morning while the market was down a bit to adjust my iron butterfly by closing two 530/600 call spreads and rolling them up to 560/610 and closing two 450/500 put spreads and rolling them up to 470/520. This position now consists of two 470/520 put spreads, two 460/510 put spreads, two 550/600 call spreads and two 560/610 call spreads. It now stands at a P/L of -$2,498, delta = -$92 and theta = +$141. So we still have moderate risk to the upside if this rally continues, but our theta is at a healthy positive level.

My August iron condor position is unchanged with a P/L of -$1,155, delta = -$30 and theta = +$130. We still have one Sept $530 call hedging the upside, but our short $570 calls stand at a delta of 32, so we need this hedge. At this point, this position has a healthy positive theta and I can afford to be patient.

By the way, do you know any other options trading coaches/instructors who post their trades publicly every day so you can see if they practice what they preach?