WDIS: Back to Cool

Delta Neutral DIA Strangle

WDIS: Back to Cool

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Volatility has expanded in the ETFs, and for this, Tony and Katie aim to place another trade in one of them, as they just freed up capital by closing AAPL and TGT. Looking at DIA, SPY, IWM and QQQ the team decides to go with the underlying that has the highest IV Rank-- DIA. Katie has a free spread on in DIA which she will look to close for a 50% winner. Aiming to stay non directional in this trade, Tony and Katie short a strangle that is delta neutral. They are able to collect over $1.00 and are about 1 SD wide.

Finally, T & K look at BBY. Tony notes that despite the fact they are losing money in the trade, he likes staying short the stock, as he believes that soon volatility will contract and the price of BBY will follow. He urges Katie to consider rolling her Calls and Puts in the trade to Feb expiration.

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