Date: 3/31/23 12:00 PM
Underlying: S&P 500 Index Fund
Est. Net Debit/Credit: $1450 credit
Master Portfolio Contracts: 5
Due to the market running up and volatility dropping, we must change the ratios on the dragonfly this week. This was the only way that I could get a good risk to reward ratio. I wanted to give the market some room to move down before we would have to do any adjustments. This is going to be a 70/30 ratio which means the risk is higher so to control the margin we are decreasing contracts. On a positive note, by doing this we are obtaining a much larger credit than we normally do.
However, we will have to adjust it quickly if the market moves to the downside. Our hope is that we get enough Theta decay through the weekend that we can close it for a profit and get out of the market quickly.
SPX trades well but sometimes the bid and ask spread can be a little wide. Make sure you work the order by 5 cents at a time. Also be patient, it will usually fill when it is bouncing around if you just leave it at the midpoint.
BTO +5x SPX 14 APR 4000 put
STO -10x SPX 14 APR 3970 put
BTO +5 SPX 14 APR 3900 put
Price: 2.50 – 3.10 credit Prices are wide! We test filled at 2.90, but be patient
Margin Requirement: $20,020