A fitting end to the week. CNBC was running their Documentary of the '87 crash. I thought it would be a mini-series, but they ran the same show over and over. I wanted to enter some calendars going into the weekend. But I didn't enter directional trades, rather it was an opportunity to adjust or sell off some profitable positions.
For entries, I was looking into a few other trades which include Skewed butterflies to take advantage of high Volatility. Today was too early for it. I want to get a reversing of the downtrend before I enter these type of trades. This drop was very healthy for the market.
LAST WEEK's CHARTS- remember these charts? We are moving right to the middle of the uptrending channel. Check it out! These have been right on.
I had been looking at the Fibonacci Retracements during this sell off. Tim Knight on Slope of Hope, offered a great intraday post of this.
I want to speak further visually expand up this, with the upward channel and a 50% fib retracement by the end of the day.
IWM daily chart
Lastly:
I exited a number of great IWM trades that took advantage of this down move. Particularly the October 78/80/82 - 2/3/1 skewed butterfly, and a Nov/Jan 81p calendar. These were a trading idea from Red Option. I picked this up when the IWM was around 83.5 about two weeks ago. I exited the IWM butterfly today just after the market hit the 38.2% fib that Tim Knight mentioned.
Other trades for the day:
USB - Continues to widen. I sold 1 more unit @ .15 for the 32.5c calendar. I will very gradually exit this trade. However, it is right in the sweet spot for me, slightly OTM. The Dec expiration date is 63 days away, and there is still $1 of premium while the underlying sits 1.23 below the strike. Perfect.
Here my current USB Risk Graph. Dec/Jan 32.5c Calendar
UNM - 1 unit of Nov/Dec 25p (underlying 23.10) , with small entries between .15-20. I won't add to this position unless the underlying moves up. There is only .45 of premium in the Nov option. I gave it a shot, but he underlying didn't encourage me, as it moved away from the strike, and worse, ITM.
UTHR - picked some calendars up today.
PDLI - 1 unit Jan/Feb 20p for .05. I would have loved to pick up more, but the sellers were not cooperative.
VRSN - 2 units - Nov/Dec 35p for .33, 1 unit Nov/Dec 32.5p for .34. I tried to balance this out, but couldn't get filled at my price with the 32.5p calendar. I am taking a shot on this combo calendar, as it does have risk if the underlying drops by more than 10%. It offers a wide Breakeven 30.93/38.61, with current underlying @ 33.
Here is the current Risk Graph for VRSN
