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High volatility
- Thread starter ChrisM
- Start date
Quote from Trajan:
anybody doing anything in DNA? The seems a few things there.
I've been watching from a safe distance. Although the spread that you set up with Bpur would seem appealing if Volatility dies down in the next few days, or the rally falls back.
Do you ever put on (no pun intended) the same type of spread with Puts? Seems you could buy the June and sell the July for a similar credit.
Puns are allowed. I would do it with puts. It's the same spread. By buying the July 5p and selling the June 5p, I have the position sometimes refered to as the Jelly Roll. I would be long synthetic stock with long call/short put with Junes and short synthetic stock with the short call/long put in the Julys. In such a position, the difference in price between the two different months synthetics is the cost of carry. Right now, the put time spread market is .25 bid at .55. If I could leg into the put spread for .30, I would essentially close down the position with a profit of .20.
In DNA, I did something different. I have a 1 by 2, buying 2 of the Jul 60c and selling 1 of the june 55c. It was done for a net debit of .05. Now when I say 1 by 2, I mean literally that was all I could get (delete pun) executed was 3 contracts at prices I liked. I think it was done for something like 13 points of vol edge.
In DNA, I did something different. I have a 1 by 2, buying 2 of the Jul 60c and selling 1 of the june 55c. It was done for a net debit of .05. Now when I say 1 by 2, I mean literally that was all I could get (delete pun) executed was 3 contracts at prices I liked. I think it was done for something like 13 points of vol edge.