Trade of the Week by TradePartner

Dear , Welcome back for another round with us and per usual, let's dive into any trades we've managed over the week. Let's start with the ES Futures/VIX trade we opened a couple of weeks ago.  In the last update, we showed you how and why we managed the way we did and this last week we closed out of everything at a healthy gain of $882 net. Next up is our COIN trade which is looking solid.  We wanted to take our 25% gain yesterday but since she is so ITM at the moment with time to spare we will hold and see if we can net more heading into earnings Aug 12th. And finally, nothing new to report on our grains trade.  Still stable and has a lot of time on it so we are holding. This week we are looking at another S&P 500 vs VIX trade.  We are still bearish mid to long term so we are expecting a pop in volatility in the next 90 days.  Here's the play: Buy 2 VXX 33  Dec17 Call @ 6.58 Sell 2 VXX 48  Sept17 Call @ 2.08 ------------------------------------------------ Sell 3 MES 4160 Sept17 Put @ 76.75 So, here's the risk graph of the VXX trade: And the sold Micro ES put is here: So, as you may have noticed, it is a naked put.  Some may not be comfortable doing that and that's ok.  We have a lot of experience selling naked so we're fine with it. Also, since it is the Micro ES contract we're selling, this allows us a bit more freedom to exit overnight should something crazy happen.  Couple that with the far more efficient SPAN margin and you can see why it is my vehicle of choice. We are looking to exit this put at any test of the strike or around a $1300-$1700 loss.  This will move our VXX trade in the green where we expect it to expire ITM netting around $2000.  If the market goes nowhere, this put's premium will flow into our account offsetting decay from the VXX trade.  If ES climbs the VXX max risk is $870 and our put would be OTM netting us that juicy theta with max gain at $1151.  We will in all likelihood manage this trade if it nears roughly 1 trading month to expiration.  Total margin is around $4600 for the entire trade and we'll look for approximately a 10% gain on margin. Trade well, Benjamin – Market Monster Hunter

Sent to: phanhoa1821960.trader@blogger.com

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