After taking off a similar setup earlier in the day, re-upping with a covered call long delta cutter setup using cheap longs in the September cycle (I paid .07 a piece for them) and shorties in the May, June cycles (for which I received 5.84/contract).
At the moment, I bought a few more long contracts than short ones, so that I can add more short call units later if the market decides not to do any of the heavy lifting for me.
Previously, I laddered the short calls out quarterly, but longer-dated options' liquidity isn't all that great here, so keeping things on the shorter duration end of the stick.
I pick up around -16/contract net delta by doing this, rendering my entire setup flatter, but still net long delta here.
At the moment, I bought a few more long contracts than short ones, so that I can add more short call units later if the market decides not to do any of the heavy lifting for me.
Previously, I laddered the short calls out quarterly, but longer-dated options' liquidity isn't all that great here, so keeping things on the shorter duration end of the stick.
I pick up around -16/contract net delta by doing this, rendering my entire setup flatter, but still net long delta here.
Trade active:
Late Post: Added a third rung ... in July at the 16 delta 307 for 2.95. Still net delta long. Will probably let May drop off before considering adding more ... .
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Late Post: Pulled off the now 1 delta May 319 for .10 here, leaving me with the June 324's, the July 307's, as well the primary December 260 covered calls. Collected a total of 8.69/contract on the laddered diagonal so far. Will look to potentially re-up with something next week, although I remain wary of being whipped in expiries after which the worst of the flu season is likely to be over.
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Sold the 16 delta July 309 on this strength for 2.60; total credits collected of 11.29.
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(Late Post): Rolled the September 410's down to the 400's before they go no bid for a .04/contract debit, with a resulting scratch point of 11.25. This has the effect of bringing in the buying power effect somewhat, since the BPE is the width of the spread minus the net credit received for these.
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(Late Post): Near the close, sold the August 325's for 2.88; scratch at 14.17 with the resulting setup the Dec 250P/Dec 260C/June 324C/July 307C/July 309C/August 325C plus the September 400 throwaway longs and, of course, long stock.
Comment:
Small correction: The 410's were multi-lots, so I actually paid .04 times the number of contracts to roll it down. :-)
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Looked at adding short delta here out in September (where the road on the cheap long calls ends), but probably don't need it here. With the grind-up off lows, setup leans net delta short.
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Out of the now 3 delta June 324's for .21 toward the close. Scratch at 13.96. Left with the July 307's, July 309s, and August 325's on the call side.
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Deployed some BP on the put side on this uptick in vol/down move: sold the July 240 short puts for 4.75; the August 232's for 5.85; and the September 227's for 6.80. I'm fine with acquiring additional shares, although I'd prefer getting into something with a higher yield.
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Now adding short delta here out in September at the 327 strike for 2.48/contract.
Comment:
Scratch/credits collected at 33.84, btw. Now just have to hand sit running into July mopex, having taken off the last of June ... .
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Closing the July 240's for .33, in for 4.75, out for .33, a 4.42 ($442) winner on that leg. Remainder: August 232P/Sept 227P/Dec 250P/July 307C/July 309C/August 325C/September 327C/December 260C with the monied 260 covered calls being the basic core position.
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Rolling the July 307C's to the August 313C's for a 1.13 credit and the July 309's to the August 315's for a 1.36 credit. Covering the August 232P's for .50 here (in for 5.85, out for .50, 5.35/$535 profit on that leg). Remaining setup: Sept 227P/Dec 250P/December 260C/August 313C/August 315C/August 325C/September 327C.
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Closed the September 227P's today for a .40 debit; in for a 6.80, out for .40, a 6.40 ($640) profit on that leg. I added a couple of short puts in the weeklies, but want to treat those as standalone trades for purposes of tracking cost basis. Remaining setup: Dec 250P/Dec 260C/August 313C/August 315C/August 325C/September 327C, along with the throwaway September 410 longs which were bid/ask .01/.02 as of today's close.
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In anticipation of having to extend duration on my overwrites, bought the January 465's for .05 a pop as throwaway longs. I then rolled the August 313C's to the October 317's for 1.30/contract, the August 315's to the October 319's for 1.60, and the August 325's to the October 332's for 1.19, leaving the September 327C's alone for now. Additionally, rolled the Dec 250P/260C covered strangle out to January 262P/262C covered straddle for an .82 credit, with resulting setup: Jan 262P/Jan 262C/Oct 317C/Oct 319C/Sept 327C/Oct 332C. I have yet to decide what to do with this position after retirement, but don't think I want my shares called away at 260 when the market has rallied to 335+. On a side note: "Somebody relieve me of my short delta already." :-)