I started off the morning pleased to see MTH down, and BIIB. However, BIIB reversed dramatically and stopped me out. Goofy. MTH still looks good, amidst strength in builders early, this put spread looks good.
As of 10 am I am sitting on 69 orders. Anything fills and I will be quite please.
I was very pleased to get filled on a vol-skewed calendar this morning.
USB – I have 9 units of the 32.5c calendar for .05. I kept backing up my price until I stopped getting filled. I think this skew may be happening with fed announcement happening next week. It feels good to put one of these on with some size. I have all but 1 spread traded between these months. The Jan 35c has HUGE volume today. It makes me a little concerned, so I will probably put a cheap hedge at that strike.
The put side of this calendar is mid-marking @ .25. Usually the call side calendar spread is substantially wider than the put. So that is a good metric. There is some dividend risk with this stock. .40 per spread, although the premium on this Dec front month is 1.4 and should keep it out of assignment risk. There is a 15:1 reward to risk ratio on this trade. And currently I am at 1/4 of my risk allocation for this trade. I will not hesitate to add to it for the right price.
This guy is incredible
The morning started off with a gap down, then the market recovered. My monthly positions are looking very good right now. After Tuesday the Sept option premium should get sucked out.