02.24.15

(sent to LaunchDL group – the example of our BigDeaL trades)

1. Bullish Iron Butterfly on $AAPL: 20:15 Diagonal Call Ratio; Diagonal Calendar Put Spread

There is two weeks to sell the puts after the MarchWk3 expiry. Selling OTM Weekly Calls and will continue to roll and adjust if bias is higher. TJ

BD.aapl

A true “cost” will be determined after time passes and we can roll.

2. SP500 $SPY Iron Condor

A. Overall Intent: Own Portfolio Protective Puts – we have a 60:20 Ratio Diagonal Calendar Put Spread.

B. Selling at the money ATM diagonal calendar call spread, ratio: 70:50. 

C. Will sell weekly calls and puts based upon market trends. 

BD.SPY

3. Celgene Bull Put Spread to fund Calls

Celgene has had positive news, a deep pipeline, strong management, and has become a biotech leader.  The put strategy takes on more risk due to a belief the stock moves higher. Selling a 20:15 diagonal calendar call spread, in part funded by the bull put spread. 

BD.CELG1

The above image does not show any option call rolls or adjustments to April call price as the $120 call is in the money by $3 already.

BD.CELG2

I believe the name continues to move higher to April earnings. My favorite biotech name.

4.  $VRX Bull Put Spread to Help Fund a 20:15 Diagonal Calendar Call Spread

BD.VRX1

 

The April put spread provides some time for $VRX to move up as the $SLXP-acquisition is EPS accretive.  Analysts can upgrade earnings potential. $SLXP lawyers will sue for an all cash deal – but it appears $SLXP is gone for $156. 

BD.VRX2

BD.VRX3

If the $VRX $156 offer falls apart, $VRX is likely to plummet and $SLXP (due to a higher bid for $SLXP and BOD approves) moves higher. This is simply an insurance policy on the $156-cash deal staying intact.

Each position is designed to make money with a few rolls. Initially we start with a debit – and a hedge with the $SPY trade.

Todd

 

disclaimer

 

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