*****UPDATE***** 5/3/12

Today as posted in twitter, I closed out the FAS May4 105-104 debit put spread attained at a net cost of .04cents per spread. The reason I say .04 total net cost is because if you refer back to the original open post(LOCATED AT THE BOTTOM) My original open credit was .04 for the whole credit spread offset trade which gave me the 105-104 debit put spread at .04 credit at the open.

Today @.08 buy to close, I closed out the short May4 109 FAS calls portion of the credit spread in that trade used to pay for the FAS 105-104 debit put spread.

So in the trade which consisted of selling

FAS May4 109-111 call credit spreads

and simultaneously buying FAS May4 105-104 debit put spreads all at total @.04 credit.

I still have the long FAS May4 111 calls part, but lets face it that’s going to expire worthless.

SO WHATS THE PROFIT?

Well originally had 1000 collateral posted in the FAS 109-111 bear call creditpsread – the 5 contracts x .04credit=1000-20=980 @risk

Today closed it out at .80x 5contracts=400

and closed the FAS May4 Calls at .08=(40)+400=360profit

That’s 360/980= 37% profit this week in that trade.

Trade note, I closed the FAS May4 109 short calls in the credit spread, due to the Non Farm Payrolls possible volatility, and did not want to risk any huge upward movement in FAS Friday

05/03/12 Bought to Close 1 FAS Put

Fas May 04 2012 104.00 Put
FAS May 04 2012 104.00 Put $3.00
05/03/12 Sold to Close -4 FAS Put

Fas May 04 2012 105.00 Put
FAS May 04 2012 105.00 Put $3.80
05/03/12 Sold to Close -1 FAS Put

Fas May 04 2012 105.00 Put
FAS May 04 2012 105.00 Put $3.80
05/03/12 Bought to Close 4 FAS Put

Fas May 04 2012 104.00 Put
FAS May 04 2012 104.00 Put $3.00
05/03/12 Bought to Close 2 FAS Call

Fas May 04 2012 109.00 Call
FAS May 04 2012 109.00 Call $0.08
05/03/12 Bought to Close 3 FAS Call

Fas May 04 2012 109.00 Call
FAS May 04 2012 109.00 Call $0.08

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On Friday Apr27, I opened a combo complex 4 leg options trade in FAS.

I all in once opened a sold May4 FAS 109/111 credit spread trade and then bought a May4 105/104 debit put spread trade on @.04credit. Please refer to original “What the Deuce” AMZN AAPL article for further explanation on this trade.

https://3ddhedgeinvestments.wordpress.com/2012/04/28/as-stewie-would-say-what-the-deuce-aapl-amzn-both-fooled-what-the-market-expected-82-2/

I will have more on how this trade is going tomorrow.

I do plan on averaging in a few more contracts on a higher bump in the Monday morning session on a gap up, or selling a low 90’s bull put spread of May4 expiries on a gap down morning, and using the credit to buy low a 100’s May4 debit call spread @0.00 cost or even a credit. That would once again be another trade being paid for or free at least, while being an iron condor as well. Think of it as what I call same expiry parlay options plays. You are given credits in Iron Condors for a set amount of gain, but in this play use them to play forward towards the max gain which could be two spreads of full value each and some credit as well. That happens if they both finish in the range of in the money. I say that because they are reversed. Your debit put plays are higher in FAS, and your debit call plays are lower, but you attained them for free, and had commissions paid for you. So possibly in this case the way I plan it is  for two trades of 1.00 spread each you paid nothing for, to possibly be worth 2.00+credit received each. Dont be discouraged though, because if only one of the debit call or put spreads strikes you still will garner a nice significant gain, or at least breakeven. I say that because someone else paid for your trade.

CAVEAT: You are creating credit spreads where you have to put up collateral, please pick far enough out sold strikes where most likely wont get yourself into roll territory! One more thing for god sakes dont do these on earnings plays!

Happy Trading

Creditspread23

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