Symbols traded today: 1DTE: QQQ, 4DTE: IWM

IWM and QQQ have been updated with results.

IWM short Bear Call Vertical Spread 4DTE

IWM has higher volatility, defined as an IVR of 25% or higher, and I chose to use longer DTE (days to expiration) options. I had intended that it be a 9DTE trade, but I erred, and let’s see how it goes.

And the results. The IWM position produced a 63.6% profit before fees. So despite the DTE error, the position did quite well.

LOT:	2	ENTRY DATE:	11/6/2023
		EXIT DATE:	11/7/2023

Entry and Exit

	CREDIT (ENTRY)	DEBIT (EXIT)	CHANGE	CHANGE %
Options premium	$ 0.54	$ 0.33	$ 0.21	63.6%
	ENTRY	EXIT	CHANGE	CHANGE %
Stock price	$ 172.45	$ 171.10	$ (1.35)	-0.8%
Implied Volatility Rate	31.2	30.1	-1.1
Days to expiration	4	3	-1

The structure of the position

CALLS/PUTS	STRIKE	ODDS EXPIRE OTM	DELTA
Long	176.00	79.0%	22
Break-even	174.54	71.5%	29.5
Short	174.00	64.0%	37

Risk and Reward

	PER CONTRACT
Reward	54.00
Risk	146.00
R/R Ratio (n:1)	2.7

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QQQ short Iron Fly

QQQ has meets my criteria for lower volatility, with an Implied Volatility Rank (IVR) of less than 25%, and so qualifies for a 1DTE trade.

The underlying share price rose by 0.8%, and that was enough to turn the position unprofitable.

LOT:	3	ENTRY DATE:	11/6/2023
		EXIT DATE:	11/7/2023

Entry and Exit

	CREDIT (ENTRY)	DEBIT (EXIT)	CHANGE	CHANGE %
Options premium	$ 2.16	$ 2.46	$ (0.30)	-12.2%
	ENTRY	EXIT	CHANGE	CHANGE %
Stock price	$ 367.50	$ 370.26	$ 2.76	0.8%
Implied Volatility Rate	16.0	12.1	-3.9
Days to expiration	1	0	-1

The structure of the position

STRUCTURE	STRIKE	ODDS EXPIRE OTM	DELTA
Calls
Long	370.00	78.0%	22
Break-even	369.16	67.0%	33.5
Short	367.00	56.0%	45
Puts
Short	367.00	54.0%	46
Break-even	365.16	50.0%	50
Long	363.00	46.0%	54

Risk and Reward

Per contract:
Reward	216.00
Risk	134.00
R/R Ratio (n:1)	0.6

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By Tim Bovee, Portland, Oregon, November 6, 2023

Disclaimer

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

License

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Based on a work at www.timbovee.com.