VXX - Bear Debit Put Spread
Used some of the income received from Credit Call Spread to pay for a Debit Put Spread. While I rarely used debit option spreads, I think this might be a good situation to employ this strategy.
I choose the 2/16 options (9 days), which is a short time frame for a debit strategy. Initially, I thought 9 days would be enough time, but it maybe too short even for the rapid decline I am expecting. I potentially may roll these out to 3/2 or 3/9.
Greeks
VXX $41.70
$39P Long
D: -.3199
G: .0486
T: - .1483
IV: 138.39% (vs. 113.46%)
$35P Short
D: -.1387
G: .0301
T: - .0922
IV: 128.30% (vs. 113.46%)
Spread:
D: -.1812
G: .0185
T: - .0561
D:
Combined positions
W:
I choose the 2/16 options (9 days), which is a short time frame for a debit strategy. Initially, I thought 9 days would be enough time, but it maybe too short even for the rapid decline I am expecting. I potentially may roll these out to 3/2 or 3/9.
Greeks
VXX $41.70
$39P Long
D: -.3199
G: .0486
T: - .1483
IV: 138.39% (vs. 113.46%)
$35P Short
D: -.1387
G: .0301
T: - .0922
IV: 128.30% (vs. 113.46%)
Spread:
D: -.1812
G: .0185
T: - .0561
D:
W:
Trade active:
Options will expire by end of the day. With IV so low, I haven't had the ability to adjust this week and I wasn't willing to increase my trade cost.
I didn't allow enough time for price to move. Additionally, with the IV% so high sticking with selling options was the smarter strategy. Good thing is I opened this trade with money received from a credit spread. I received more credit than premium i paid.
Options will expire by end of the day. With IV so low, I haven't had the ability to adjust this week and I wasn't willing to increase my trade cost.
I didn't allow enough time for price to move. Additionally, with the IV% so high sticking with selling options was the smarter strategy. Good thing is I opened this trade with money received from a credit spread. I received more credit than premium i paid.
