Weekly Pin Butterfly Strategy

Week 4 - Update
Bought the SNAP 54 calendar put spread sold the 4DTE bought the 18DTE debit @ $0.94

Rationale: 184% vol in the front and 110% on the back. Playing contraction and earnings Thursday after the close. SNAP has a nice record of earnings underperforming. Hoping to either exit on vol contraction in a day or so looking to make 20%.

Eying a number of flies to put on later in the week.
 
Update
Sold Calendar in Snap @ $1.14 on open today. Up =$0.20

Entered
IWM 2/5/21 1:3:2 put fly 212:205:203 @ $0.86
putting on before a number of call flies tomorrow.
 
Finished up this book last night.
market taker's edge.jpg


Good chapters about gamma and reverse gamma scalping. Kind of makes the argument that explains why pinning can happed based on market makers gamma scalping around strikes in which they carry large positions going into expiration. Author writes in a clear style. Although the focus of the book is not for retail traders it is a great read to understand what those who are taking the other side of the order are doing and why they are not the enemy.
 
Week 4 Update
Added following flies this morning all expiration 2/5/21

APPL 1:2:1 call 135-140-145 @ $1.17
PTON 1:2:1 call 145-160-172.5 @ $2.35
NIO 1:3:2 call 56-60-62 @ $0.80
RIOT 1:3:2 call 22-25-26.5 @ $0.60
EBAY 1:3:2 put 60-57-55.5 @ $0.66

All tied to short guts at strike with highest OI
 
Week 4 - Update Results

Flies
APPL 1:2:1 call 135-140-145 @ $1.17 exit @ $1.50 = + $0.33
PTON 1:2:1 call 145-160-172.5 @ $2.35 exit @ $1.34 = -$1.01
NIO 1:3:2 call 56-60-62 @ $0.80 exit @ $1.50 = +$0.70
RIOT 1:3:2 call 22-25-26.5 @ $0.60 exit @ $0.95 = +$0.35
EBAY 1:3:2 put 60-57-55.5 @ $0.66 exit @ $0.33 = -$0.33
IWM 1:3:3 put 212-205-203 @ $0.86 exit @ $0.25 = -$0.61
VXX 1:2:1 call short 16.5-18.5-20.5 @ credit $0.25 exit at $0.16 = +$0.09

total flies p/l $0.18
winning trade percent

Calendar
SNAP 54 @ $0.94 exit @ $1.14 + $0.20

total calendar p /l : $0.20
winning trade percent: 100

Straddle
TLRY 26 @ $1.05 exit @ $1.15 + $0.10

total straddle p/l: $0.10
winning trade percent: 100

overall p/l week 4: + $0.48

Take Aways:
  • Another positive week so happy with the results.
  • Mental errors on dealing with APPL and dividend risk would have avoided this trade.
  • Went with some wider fly set up and PTON was really promising until it's earning dump. Was in the middle of the profit tent. I legged out for a better fill keeping P/L positive for the week. With the day job I can't watch these all day so have to pick an exit and go.
  • Should have let TLRY run more on the expy straddle play
  • Outtrade with the fucking VXX short fly. Web platform struggling so clunked around with desktop and mixed it up. Out for a win but didn't like the risk reward and couldn't exit intraday to avoid PDT jail so held it overnight.
  • Could have been a few hundred more in profits if PTON worked out.
  • Am going to be more careful with earnings impacts in the coming week.
  • Didn't see any iron fly set ups I liked so didn't trade. Trying to trade the opportunities I see and not force strategies when the set up isn't there just to trade.
  • The majority I put on Wednesday and took profits and limited losses on all of them on Thursday except VXX and PTON.
  • Flat for the weekend gonna take my $48 and buy a six pack of fin du monde and enjoy the polar vortex. Finishing Euan Sinclair "Positional Option Trading This Weekend"
Happy trading and have a good weekend.
 
Added a day scalp in a TSLA fly 1:3:2 put 2/5/21 exp 855-850-847.5 in at $0.60 out at $0.90 + $30 up $78 for the week.
 
caroy said:
Added a day scalp in a TSLA fly 1:3:2 put 2/5/21 exp 855-850-847.5 in at $0.60 out at $0.90 + $30 up $78 for the week.
More...
total return on initial account up 29.3% for the month while only only putting 25% of my capital in play each week. This is a small account looking to hone my strategies before upping the account size around April.
 
caroy said:
Added a day scalp in a TSLA fly 1:3:2 put 2/5/21 exp 855-850-847.5 in at $0.60 out at $0.90 + $30 up $78 for the week.
More...
Kicking myself that bitch is at $3.00 now. Sigh. Have to learn patience.
 
OptionsOptionsOptions said:
  • Patience can turn into Greed.
  • Waiting for extra profit can turn a winning trade into a loosing trade.
  • One in the hand is worth two in the bush.
More...
I hear you. Well said. With the flies maybe I should just be happy with 2x or 3x my initial outlay and forget about that max profit tent. Screwed around with PTON and watched a winner become a loser this week. And I suppose DeepF*%^ngValue watching his $13 millions loss in GME is a good example of patience turning into greed.
 
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