Quote Originally Posted by ernsttanaka View Post
I got the entry to the cent 73.14

Sold last weeks 74 calls for 59ct credit
rolled to this weeks 74 for $1 credit

Today I bought the 74-72 put vertical for 62ct.

So what can happen this Friday;

a. We are above $74 -- I get assign on 74 -- making 74- 73.14 = 86ct+59ct+100ct-62 = 183ct or 2.5% for 8 days
b. We are below $74 but above 72 -- I use the 74 put and sell the IWM for 74 and I will have the same result as under a.
c. We are below 72 -- same result as under b. but I rebuy the IWM for 72 with the profit from b. I effectively own for 72-1.83 (I am getting close to break even considering the current Robot stop)

Alternatively for B; I can sell the 74put, expire the 72 put and roll the short call to next week. This depending the DMF20 and my market "feel".

Ernst
I ended up closing the vertical put 72/74 for 23ct credit and rolling the 74call for this week to next week for 1.18ct. So my new max profit if we stay above 74 is 183ct+23ct+118ct=324ct. Initial entry was per Robot 73.14+3.24 equals 76.38 and my current break even is 74-3.24 = 70.76

The put vertical served its purpose - yesterday during the sell off - my IWM position was more or less flat for the day. So my 2yr old and I could spent some time in the Natural History Museum ;)

BTW I still wish we had a TLT robot -- I "predict" the next significant trade-able trend will be short TLT.