Amazon AMZN Wide Short Strangle
December 4th, 2009, 1:14 pm EST. Posted under Margin Portfolio (MP) by ThetaTrader.
Post Tags: , AMZN, CLOSED
01/05/2009 - ThetaOptions Margin Portfolio – AMZN Strangle CLOSED – Profit $282
We decided to close the AMZN strangle now and forgo the last $20 of profit. There’s no sense waiting 5 more days to collect $20 when we know we’re going to be assigned the PUT & CALL.
Filled Order:
BOT +1 STRANGLE AMZN 100 JAN 10 110/150 CALL/PUT @40.40 debit
Profit Calc:
- Open Position for $4,400 Credit
- Purchase Vertical PUT & bought back Short PUT – $68 debit
- Closed Trade for $4,050 debit
- 4400-68-4050 = $282 in (4) weeks with $2700 Trade Margin; that’s 10% risk/reward
Position: We’ll let the 110 PUT expire worthless
12/04/2009 - ThetaOptions Margin Portfolio – AMZN Wide Short Strangle Initiated
Our Margin Portfolio has entered a Wide Short Strangle on Amazon for the month of JAN – This particular strangle allows us to have a little more downside protection, as we feel that may be the direction on AMZN over the next 6 weeks. The goal is to collect 10% premium for our risk\reward within 3-4 weeks.
Order:
Sell To Open: (1) AMZN JAN 110/150 CALL/PUT Strangle – $44.0 Credit
Position: This position uses $3000 margin. therefore, we will enter an order to buy back the strangle @ $41 debit (gtc) and forgo the last $100
Risk\Reward Data: Our break-even points are between 106-154. Anywhere in-between 110-150 we get the keep the full premium between 110 & 150.
Question: Why is the Margin Requirement so high after placing this trade?
Answer: Because we collected $4400 for the sell of the entire spread + $2750 in actual margin.
Pages: 1 2