Name of this strategy and risk, please

Yea I messed up, that's what happens when you are tired and distracted.
IBM4.png

This is closer no December options for IBM but November will do. Yep this is helped by a rise in volatility. I don't know what to call it. You could loose a maximum of 738 dollars plus commissions. I don't know what you could make on it considering IBM is around a 26 vol.
The volatility skew the difference between October and November this needs to widen to get help from volatility. This is the risk graph a week before October expiration.
IBM5.png

IBM going down a lot would be very helpful.
 
Quote from dagnyt:

Diagonal backspread.

Why does it matter what it's called?

Mark
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Can be helpful to know the name of the strategy if checking to see what the margin requirements are.
 
>> Yea I messed up, that's what happens when you are tired and distracted. <<

I find that my best mess ups here occur during slow trading days when I'm monitoring positions and posting :)


>> This is closer no December options for IBM but November will do. Yep this is helped by a rise in volatility. I don't know what to call it... The volatility skew the difference between October and November this needs to widen to get help from volatility. <<

These positions are better when you nab some pre earnings IV expansion on the near month.


>> IBM going down a lot would be very helpful. <<

Going up a lot isn't a bad thing either.


If I provided some numbers (2 simple positions), could you put up a pretty picture of each?
 
>> If I provided some numbers (2 simple positions), could you put up a pretty picture of each? <<

Quote from tommylove3:

Ok
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9/18/09
Oct expiration
$70 stk
$3.05 Oct 70p
$6.25 Oct 75p

1st position: long 140 shs, long 3 Oct 70p

2nd position: long 140 shs, long 2 Oct 75p

Thx
 
Quote from spindr0:

>> If I provided some numbers (2 simple positions), could you put up a pretty picture of each? <<


9/18/09
Oct expiration
$70 stk
$3.05 Oct 70p
$6.25 Oct 75p

1st position: long 140 shs, long 3 Oct 70p

2nd position: long 140 shs, long 2 Oct 75p
More...
At this point I figured out that the ITM 2 put position has a bearish bias. That leads me to another question.

Suppose I start out delta neutral with long stock at 70 and long Oct 70 puts. Suppose after a series of gamma scalps, XYZ is now 66, the Oct 70 puts have a delta of .72 and the Oct 65 puts have a delta of .48

Would there be any good reason to substitute 3 long Oct 65 puts for every 2 long Oct 70 puts? For some reason, that 4 pts of intrinsic intrigues me. Obviously, subsequent change in IV would be a factor as to which position would do better. Any other reasons?
 
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