Rationale:
-CI is at multi-year support (148.25) and I wanted exposure to the short side and also needed short delta for portfolio
-set up as an unbalanced butterfly; but note position of initial price on risk graph - monitor closely as it may make more sense to set up position with price at front of the tent or at the peak of tent at the 1SD level going forward
Recap:
How could I have traded this better?
IVR=58%
Potential ROC= 764/1000=76%
Key corporate events (earnings, dividend, investor day, etc.)= investor day 5/31 (wasn't any notable news coverage on it so likely non-event)
How much risk should/did I take? -$236; appropriate level of risk
Trade Planning
-structure: unbalance butterfly
-major support: 148 / 133 (multi year support levels)
-add point: NA
-stop loss: price breaking and holding above $150 level
-take profit price / risk-reduction plan: if price is holding below $144 would like to keep on until expiration
2019-06-05 21:12:58
-closed out of trade today as CI pulled back after showing strength the prior 3 sessions as it bounced strongly off of 148 support
-give that this name is above support and holding above there, the premise for this trade is incorrect
-took this trade near long term support (thought it would break down and wanted to balance out long exposure to healthcare sector via LLY) so it is now clear that the support level is holding
-on trade entry, the current price was way ahead of the beginning of the tent, which makes it imperative to get out quickly if the ideal price action isn't there
-in hindsight, this position was aggressively bearish (did need to be that bearish and probably could be more patient if I wasn't)
Execution detail:
Date/time | Symbol | Side | Price | Position |
---|---|---|---|---|
2019-05-29 13:30:39 | JUL19 19 135 PUT | buy | $3.160 | long |
2019-05-29 13:30:39 | JUL19 19 140 PUT | sell | $4.540 | short |
2019-05-29 13:30:39 | JUL19 19 145 PUT | buy | $6.400 | long |
2019-06-05 15:56:12 | JUL19 19 135 PUT | sell | $1.150 | 0 |
2019-06-05 15:56:12 | JUL19 19 140 PUT | buy | $1.840 | 0 |
2019-06-05 15:56:12 | JUL19 19 145 PUT | sell | $2.850 | 0 |
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