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A New Slant on GLD
- Thread starter optionsmaven
- Start date
Quote from optionsmaven:
Hi donnap,
No, you have to look at earlier posts. Initially, I entered a Feb/Jan diagonal, buying the 134 and selling the 135 for a debit of 0.80. Today's trade was to close that spread at a credit of 1.02 (a profit of 0.22 less commissions) and roll up to a new spread at higher strikes. This was done in order that a diagonal with more time value in the Jan short could be sold.
Josh
My apologies for the shoot from the hip post.
BTW, I recommended this thread in a PM about managing diags.
You've got it traderlux. My philosophy is that whenever you can roll to a better position for a credit, you're doing something right. lol
Josh
Josh
This is an update for those who have followed the progress of the diagonal spread strategy I first posted in December.
I initiated the strategy by entering a 5 contract diagonal spread in the GLD Feb/Jan put strikes at the Dec expiry, buying the 134's and selling the 135's for a debit of 0.80. The total margin required for the trade was $900. GLD moved sharply higher in just a few days and I closed the position on Dec 29th for a credit of 1.02, netting a 0.22 credit ($80, after deducting brokerage commissions). On that same day I entered a new 5 contract Feb/Jan spread at the 136/137 strikes for a debit of 1.04. GLD subsequently sold off and, when I felt that near term support had been reached, I added 5 more contracts at the same strikes for a debit of 0.65 on Jan 5th. I added another 10 contracts on Jan 12th, again at the same strikes, for a debit of 0.68.
Summing up then, I currently have a total of 20 contracts at an average debit of 0.7625 ($3,525 total margin required). As of the close on Jan 12th, the MTM value of the position is $3,720, so the strategy is coming along nicely. Importantly, with only 7 trading days remaining in the Jan options cycle, there is about 60 cents left of time value in the Jan strikes, all of which will go away by Friday a week. Thus, a good ROI looms on the horizon.
For those interested in how I wind this position up, the exit trades will be posted at blog.wastingassets.net as well as on the results page at wastingassets.net.
Cheers
I initiated the strategy by entering a 5 contract diagonal spread in the GLD Feb/Jan put strikes at the Dec expiry, buying the 134's and selling the 135's for a debit of 0.80. The total margin required for the trade was $900. GLD moved sharply higher in just a few days and I closed the position on Dec 29th for a credit of 1.02, netting a 0.22 credit ($80, after deducting brokerage commissions). On that same day I entered a new 5 contract Feb/Jan spread at the 136/137 strikes for a debit of 1.04. GLD subsequently sold off and, when I felt that near term support had been reached, I added 5 more contracts at the same strikes for a debit of 0.65 on Jan 5th. I added another 10 contracts on Jan 12th, again at the same strikes, for a debit of 0.68.
Summing up then, I currently have a total of 20 contracts at an average debit of 0.7625 ($3,525 total margin required). As of the close on Jan 12th, the MTM value of the position is $3,720, so the strategy is coming along nicely. Importantly, with only 7 trading days remaining in the Jan options cycle, there is about 60 cents left of time value in the Jan strikes, all of which will go away by Friday a week. Thus, a good ROI looms on the horizon.
For those interested in how I wind this position up, the exit trades will be posted at blog.wastingassets.net as well as on the results page at wastingassets.net.
Cheers