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Anatomy of a Trade

A Small Loser is Better Than a Large One

Anatomy of a Trade

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

WYNN’s IVR was relatively high after the stock price dropped. On JUN 21st, we sold a 1SD synthetic strangle in IRA.

Unfortunately, the stock price kept going down and broke through the short put strike. Mechanically, we rolled down the call spread and converted the whole position to an Iron Fly.

Four days before July expiration, our position was still down, so we rolled the whole position out to the next month and into earnings.

The day before earnings, the stock price came back to our short strikes, so we closed the whole trade as a small loser.

Tune in as Tom and Tony rehash all of the details of this trade!

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