The setup for April’s IC is different from March and May. Due to the larger downside risks in March, I initiated a 840-850 call spread for $0.70 that is 1 SD away from the closes strike price.
Subsequently, I was able to put out a 740-730 put spread for $0.50 at a delta of 0.10 .
I thought that I will be able to let both spread expire in April. However, 3 days before expiry the strike price is at 819. On that Monday the move took RUT up to 828. There is a high possbility that within the next 2 days RUT will close in the money.
I’m not about to take that risk. As theta deceases, gamma accelerates such that it becomes expensive to buy back for safety.
Still 5.6% profit is a good return for not doing much. Will keep posted on my May IC.
Kyith is the Owner and Sole Writer behind Investment Moats. Readers tune in to Investment Moats to learn and build stronger, firmer wealth foundations, how to have a Passive investment strategy, know more about investing in REITs and the nuts and bolts of Active Investing.
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Kyith worked as an IT operations engineer from 2004 to 2019. Currently, he works as a Senior Solutions Specialist in Fee-only Wealth Advisory firm Providend.
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