Thursday, October 9, 2008

Another IWM Straddle

Here's an example of a 2nd IWM straddle I placed yesterday, actually a strangle. I bought:

IWM 58 Calls for $1.45
IWM 53 puts for $1.34
Total: $2.79

At 3PM, these options were worth:

IWM 58 Calls: 0.47
IWM 53 puts for $2.92
Total: $3.39

Profit: 21%, in 1 day.

At 3:30PM they were worth:

IWM 58 Calls: $0.49
IWM 53 puts for $3.22
Total: $3.71

Profit: 33%

Final update at 4PM (with markets closed):

IWM 58 Calls: 0.25
IWM 53 puts for $5.00
Total: $5.25

Profit: 88% (in 1 day)



A side note on last week's straddle. Had I not sold it, today it would be worth:

68 Calls: $0.02
67 Puts: $16
Total: $16.02

Since the cost was about $4, the profit would have been 4X (300%).

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