OPENING: VIX JULY 19TH 16/19 SHORT CALL VERTICAL
... for a .75 ($75)/contract credit.
Another "Term Structure" trade (See Posts, Below). Since the beginning of the year, all of them have been setup as 16/19's or 17/20's and have been filled for around .75/contract.
Naturally, I look to set these up in expiries of 90 days or less; 120 days, after all, is an awfully long time to "get your candy." That being said, I do shoot to take these off at 50% max, so it's not like I'm usually waiting until the bitter end. The additional notion here is that the summer months (May (when you're supposed to sell and go away) through August tend to be cyclically quiet months for the market and for volatility), so I'm comfortable with going out a little farther in time with these if they fall in that period ... .
Notes: A few people have asked whether I'm "short VIX" with these. That would be basically correct. However, the real notion is that if you look at long-term moving averages, VIX stays below "the blue line" (currently, 15.37) the vast majority of the time, so these setups are bets that it will continue to do that or -- at the very least -- be below that during the life of the setup such that these can be exited profitably. That being said, it's only a matter of time before VIX rears its ugly head and pokes itself over the line, and I'm fine with that, since I can roll these spreads out in time if, as expiry approaches, it appears that price will not be below the short call strike ... .
Another "Term Structure" trade (See Posts, Below). Since the beginning of the year, all of them have been setup as 16/19's or 17/20's and have been filled for around .75/contract.
Naturally, I look to set these up in expiries of 90 days or less; 120 days, after all, is an awfully long time to "get your candy." That being said, I do shoot to take these off at 50% max, so it's not like I'm usually waiting until the bitter end. The additional notion here is that the summer months (May (when you're supposed to sell and go away) through August tend to be cyclically quiet months for the market and for volatility), so I'm comfortable with going out a little farther in time with these if they fall in that period ... .
Notes: A few people have asked whether I'm "short VIX" with these. That would be basically correct. However, the real notion is that if you look at long-term moving averages, VIX stays below "the blue line" (currently, 15.37) the vast majority of the time, so these setups are bets that it will continue to do that or -- at the very least -- be below that during the life of the setup such that these can be exited profitably. That being said, it's only a matter of time before VIX rears its ugly head and pokes itself over the line, and I'm fine with that, since I can roll these spreads out in time if, as expiry approaches, it appears that price will not be below the short call strike ... .
Trade closed manually:
Covering for a .65 db here, freeing up buying power. I'm liking the iron flies' metrics better for these plays ... .
