How to win BIGLY

August 14, 2017

In the trade IDEAS post published on August 10, and tacked on to the back of TWIM for August 13, I laid out the game plan for profiting off of the North Korea spike in the $VIX. Well, those positions are profiting by a whole bunch today.

 

$VXX - This was an easy call. It's down over 10% as of writing at 12:53pm and will likely continue to sink into the 12s and 11s. Suggested position was the SEP 12/14 debit put spread x2 @ 1.12, now trading at 1.50 (+$75). The plan is to leave this on until a close under 12 or the end of the week.

 

$EWY - This was not an easy call. Despite huge implied volatility, I was unable to sell premium as far away from the market as I like and collect a decent net credit on a bull put spread. However, the SEP 59/64 credit put spread collected 0.72 with a 65% chance of profit, which was the best I could do. It's now trading at 0.42 (+$30). The plan is to close this very soon @ 0.35 for a profit of $37.

 

$HTZ - Not discussed here, $HTZ ripped higher after earnings last week, and I said that if it closed above staunch resistance at 18, it would soon rip into the 20s. The SEP 17.5/20 debit call spread was trading for ~1.15 at the time, and trading 2 lots would yield a $50 profit today, and so this position has been closed - I got the move higher I was looking for.

 

 

 

This post may seem like a bit of gloating and a victory lap, but hey, this Q2 earnings season was a real slog. It's nice to finally throw some winners on the board. All of the iron condors posted here are still doing fine and look like they will be profitable ... for now. It will be interesting to see how this week plays out, and will of course be discussed, reviewed, and analyzed on Saturday.

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