Traders Playground

Buying Swing: on AAPL we had a 530 525 515 pB- , so we added same contract amount 510 puts at 2.55-3.00 and when we saw the premium shortly thereafter spike on the 515 puts we locked that in at 8.70-.25. So now the bottom wing has been replaced so leaves us with 530 525 510 butterfly. big smiles we made big profits on that move about 4x additional profit, ofcorse we have risk if we keep falling, so the strategy will be to renter the 515 position either as it loses premium and gets back to 2.00 area or on weakness that forces us back in around 7 buck area. the longer we hold the 514 support line the more premium goes bye bye this friday. Also Idealy we would love to see a bounce on AAPL where we could exit the 525 short leg at 5 bucks. at that point we would exit other 1/2 creating an O2B = open body butterfly play if were bearish after a bounce or exit the play entirely at that point with profits above max profits for a butterfly.

This trade is one part of a larger strategy so please look back at Previous posts to see the whole picture. AND IF YOU ARE NEW, PAPER TRADE FOR AT LEAST A FEW MONTHS because this is ADVANCED OPTIONS TRADING !!