The Implied Volatility Rank of IYR is at 65 and with a down move of around 6% in the last 20 days, I expect we are going to start a correction soon around the value area. So I decided to sell a Strangle to collect some premium. With 37 days to expiration I Sold the 80/76 Strangle for 0.95 credit. That will give me a 58% probability to make money, but if I close it when the price of the strangle reach 0.48 my probabilities jump to 80%, so that's the plan.
The Trade: Expiration = Feb 16 Sell 80 Call Sell 76 Put Credit Received = $0.95 ea Probability of profit 58%
Dagangan ditutup: hentian tercapai
⋅
Wanted to freed up capital so I took the loss on this one.
It should be good but personally I have to see some kind of a reversal trend first.
AlexanderGotay
⋅
@Sandwichstealer, Thanks for the feedback. This is a neutral trade, so I really don't mind the direction, as long as it doesn't move more than what is expected. Good Luck!