EL TRADES OPTIONS

This blog will show my longer term Swing trades using OPTIONS. I use specific income producing option strategies with a DIRECTIONAL BIAS. Having a directional bias is critical in earning more, even from what are generally called income trades such as butterflies and condors. The aim of my strategies is to give me more than a 66% edge and to provide a greater than 80% win rate within that edge. The blog shows you the trades I make and how I manage them. For my directional bias, I use the same EL methodology as I employ in my day trading that you have seen for years in the original ElectronicLocal blog. Read the disclaimer.

Monday, July 2, 2012

Batman

I put on the RUT position below on Thursday and Friday.  There are three trades in the position so far. They are Butterflies and the idea is to capture a wide tent and earn 10%. The position is a little down as RUT rallied on Friday. On Friday, I added another 10 sets to Thursday's original butterfly - 710/760/810 AUG PUTs and later in the day on Friday I added the 870/820/770 AUG PUT butterfly.


This gives me a tent of 738 to 841 wide for break even and a decent maximum profit in the tent that will allow adjustments if needed. I hope to add to this position so that the Reg-T margin is about $200K. A 10% profit will then earn me $20,000 and I hope to do this in the next 30 days or less.


A down move will push me towards profit and an upmove will allow me to add to the position. We'll see how it goes.






The AAPL position is still on with price moving back into the middle of the tent. I'm not making any money on that trade yet as volatility and price moved against me. Let's see what happens this week as theta (price erosion) kicks in.
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2 comments:

  1. DavidJuly 2, 2012 at 7:18 AM

    Out of interest, why RUT rather than ES options? Isn't the spread tighter and liquidity better?

    ReplyDelete
  2. Electronic LocalJuly 9, 2012 at 9:23 PM

    David, I think RUT is a better market for options. I trade mostlt at about mid price so have not noticed any problem with either liquidity or spread.

    ReplyDelete

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