I entered this position XLF while Private Trader was hosted on Blogger and experiencing huge platform problems. As a result, I traded XLF without posting an analysis of any short.
I have since switched to WordPress as my host and exited the XLF position today.
Here’s a brief description of the trade and the results.
Financial Select Sector SPDR ETF (XLF)
Update 1/5/2017: XLF moved into a series of sideways swings after I entered the position. I exited at 27% of maximum potential profit.
Shares declined by 0.1% over 29 days, or a -2% annual rate. The options position produced a 37.3% yield on debit for a +470% annual rate.
I’m looking at XLF as a potion volatility play. Implied volatility is sufficiently high to meet my guidelines for further consideration: At the 50th percentile or above of either the annual volatility range or the most recent broad swing.
The trade was based on one entered by Ryan at Dough.
I shall use the JAN options, which expire Jan. 20, 2017.
I’m structuring the trade as an iron fly.
The premium, $1.03, is 52% of the width of the position’s wings.
Decision for My Account
I entered a position on XLF as described above. The stock at time of entry was priced at $23.41.
By Tim Bovee, Portland, Oregon, Dec. 7, 2016