OPENING (IRA): QQQ NOV 15TH 182/JUNE 19TH 218 LONG PUT DIAGONAL

... for a 26.47 debit.


Metrics:

Max Profit on Setup: 9.53 ($953)
Max Loss on Setup: 26.47 ($2647)
Break Even: 191.43
Debit Paid to Spread Width Ratio: 73.5%
Delta/Theta: -62.91/4.51

Notes: While I'd like to wait for QQQ to revisit all time highs to put this on, I'm pulling the trigger on this delta cutter here in the IRA (See Post Below), buying the 90 in the back month, and selling the 30 in the front one. I'll work this puppy like a covered put ... .

Trade active:

Rolling the 182 short put out on weakness from Nov to Dec for a 1.68 credit. Cost basis in diagonal now 24.79.

Trade active:

Rolling the 182 short put up intraexpiry to the 191 (30 delta) for a 1.32 credit. Cost basis now 23.47; BE 194.53 versus 197.34 spot. Delta/theta -51.46/3.09.

Trade active:

The temptation here is to chase the short put up the ladder in panic as your hedge loses money. Unfortunately, with this up move comes a down tick in IV, so I'm basically waiting for one of two things to occur: (a) the short put to approach worthless; (b) a down move and up tick in volatility, such that the credit received on roll is more productive.

Trade active:

Got a move/uptick in vol. Rolling from the December 191 to the January 195 for a 2.45 credit. Cost basis now 21.02; BE 196.98 versus 199.76 spot. Delta/theta -42.01/4.01.

Trade active:

All I can say that I'm glad that this is a hedge against long stock in my portfolio, so whatI've lost in this setup, I've gained with the stock. In any event, rolling the January 195 short put to February 198 for a 1.10 credit. Cost basis now at 19.92; BE of 198.08; delta/theta at -40.42/1.04.

Trade active:

After the February 198 expired worthless, was debating whether to sell out of the 218 long put. With this sell-off here, selling the March 198 short put for .42; cost basis now at 19.50 with a break even of 198.50. I'm unlikely to make any money on this setup the way in currently stands in the absence of a substantial sell-off, but it started out as a hedge, so part of what I lost on this setup, I gained with static long delta stock gains. Delta/theta -25.96/-.51.

Trade active:

Yowsa! Rolling out the March 20th 198 a mere week to the March 27th 198 for a .31 credit to take advantage of this weakness; cost basis of 19.19.

Comment:

Correction: Rolled to the 197.5 (as there is no 198) in that expiry.

Trade active:

More weakness, so rolled out "as is" another week for a .36 credit; cost basis of 18.83; 199.17 break even.

Trade active:

Rolled out and up to the April 17th 200 for a 1.52 credit; cost basis of 17.31; break even of 200.69.

Comment:

The max I can make on this here is 18.00, and it's currently trading at 17.70, so taking it off here for a small profit. Additionally, there isn't much short delta left in it, so it's not acting as the greatest hedge, the 200 short put is beaucoup illiquid, making an "as is" roll pesky, and it's in wayyy better shape than it was a mere four weeks ago, when it was looking like a major loser.