Amazon like the other rest of the market has been trending down. We did not get a full Santa Claus rally as expected. Only one day and then it reversed. One of the benefits of these broken wing butterflies is that we can change direction quickly.
We are going to do that today with the Amazon existing broken wing butterfly. We will close that trade for a debit of around 1.22 and we also are carrying forward a debit. We will then switch direction by unhinging the trade to the downside. This will allow profits if the market keeps going down and give us some cushion to the upside.
Amazon (AMZN): 82.96
TRADE ACTION 1: CLOSE the AMZN 30 Dec 79/84 puts and the 30 Dec 84/85 call broken wing butterfly for a debit of around 1.35-1.40
BTC the AMZN 30 Dec 84 put
STC the AMZN 30 Dec 79 put
BTC the AMZN 30 Dec 84 call
STC the AMZN 30 Dec 85 call
Work the order, markets are still wide and be patient.
TRADE ACTION 2: OPEN the AMZN 20 Jan (23) 83/ 84 put and the 20 Jan (23) 84 / 89 call bearish broken wing butterfly for a net credit of around 2.20
BTO the AMZN 20 Jan (23) 83 put
STO the AMZN 20 Jan (23) 84 put
STO the AMZN 20 Jan (23) 84 call
BTO the AMZN 20 Jan (23) 89 call
The Master Portfolio is trading 5 contracts.