Trade Findings and Adjustments 06-16-2020
I would look to start with 2-3 contracts and two different scenarios
IF I want to play resistance 275 Jan 22 Long Call for $36
Primary exit at $270-$275 I exit my trade for a profit
Secondary exit I will dollar cost average
Protective put
BTO Stock @ 18.60
BTO Jul 18 2020 Long Put for 2.20
Overall CB = 18.60 + 2.20 = 20.80 top 20.85
IF we get filled at 20.85 – Right to sell at 18 = 2.85 risk in trade until puts expire
IF it goes to $25 then you make 4.15 / 20.85 = 19.90% ROI
IF it goes back to 11.84 filling the gap 18.00 – 11.84 = 6.16
ON 500 shares Right to sell @ 18 = $9,000 / 11.84 = 760 shares
Calendar Strangle
Jul 18 Long Put
Sept 19 Long call
Total cost basis = 5.40
So to the downside I see $6.16 to fill the gap
Which means CB 6.16 – 5.40 = Possible $0.76 of profit 0.76/5.40 = 14.07% ROI
To the upside = 2017 high of $25
From 19 long call to 25= $6 – 5.40 = $0.60 possible guaranteed profit /5.40 = 11.1% ROI
