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RUT Weirdor

Discussion in 'Options' started by tman, Oct 11, 2014.

  1. tman

    tman Active Member

  2. tom

    tom Administrator Staff Member

    That's fine. You should be able to upload files in the forums. Might be easier. Do you have any screen shots?
     
  3. tman

    tman Active Member

  4. tom

    tom Administrator Staff Member

    What was the delta of your short puts at 940?
     
  5. tman

    tman Active Member

    approx 10. now, more like 16. position marking -$590
     
  6. Rahul

    Rahul Member

    Hi, I noticed you have modified the original Weidor strategy. Usually 1 tranche is 12 put credit spreads / 1 put debit spread and 3-4 call credit spreads. You went with 15 put credit spreads. What's the reasoning?
    Also, the first adjustment is 40 delta in your doc file. The manual says 25 delta. What's your reason for this shift?
     
  7. tman

    tman Active Member

    I sell enough put spreads to cover 2.5 times the cost of the put spread I purchased. I will adjust at 40 delta because I have 2 tranches working, therefore double the size. I intend to be conservative and adjust at 40 instead of 50 which would be 2 x 25 in the manual.
     
  8. Rahul

    Rahul Member

    Sorry for asking again, but I am new at this. Do you have a manual / notes that you are following? If so, can you please upload the pdf?
     
  9. tman

    tman Active Member

    Don't be sorry. I haven't traded this structure in a while, though I had excellent results when I did 1-2 year ago. I viewed the capitaldiscussions webinar on the jeep trade which reignited my interest in the trade. I plan on trading it as presented in the webinar with the exception that the amount of put spreads sold will be flexible in that I want to receive 2.5x the long put spread premium.
     
  10. Rahul

    Rahul Member

    Thanks. I will be following your results. I currently have a weidor on and already adjusted it 2 times on the downside. Currently at 14 delta...and if RUT goes down again... I will remove the weidor at 20 delta for around 1.2K loss. This is my first weidor and put it on 2 wks ago just before the massacre. ... great timing!
     
  11. tman

    tman Active Member

    How did you adjust? Also, I plan on posting my risk graph periodically. Please let me know if anyone considers this oversharing.
     
  12. tom

    tom Administrator Staff Member

    It's fine so share your risk graph. You may want to start a new thread for each trade or all of your trades combined.
     
  13. Rahul

    Rahul Member

    Yes please share your risk graphs.

    I had started with selling 8 delta 20pt wide put spreads (12 spreads); bought 1 20pt put spread (10pts below price); and then sold 3 call spreads at 8 delta to be delta neutral. Every since the RUT has fallen and my first adjustment was at 25 delta and second at 20 delta. In both cases I bought back 1 short put from my put spreads. Now currently at 14 delta.
     
  14. Nate

    Nate New Member

    I'd be interested in your adjustments too. I've had a RUT weirder on since late August and am currently down about 5% going into expiration week. Plan to remove it as soon as possible on Monday, as gamma has become too large to manage effectively (lesson learned!). I cut my calls and rolled up my put credit spreads in early September right before the continuous decline. I've since added a number of put debit spreads and puts to manage delta as the RUT fell. I definitely should have ended it a couple of weeks ago when I was up about 3% but, again, lesson learned. My other Rut weirdors have done pretty well and have had minimal adjustments. Out of 6 so far this year, I've managed 1 tie and 5 wins, averaging about a 2-3% profit on Reg-T margin.
     
  15. tman

    tman Active Member

    Did either of you buy unit puts way below? As you can see, I did. Anyone have any thoughts on buying the unit put in the front month (November in this case)? I was thinking that the protection would kick in faster/closer and I expect to be out of the trade by Nov expiry.
     
  16. Nate

    Nate New Member

    I bought two 2 delta puts at the beginning of the trade, but by the time the market began its decline, they didn't help. Maybe if I had rolled them up when I rolled my put credit spread up back in September, it would have been more effective. I could definitely see puts in the front end month helping out more early in the trade if there's a sharp decline. There's a couple of modifications I may try for the next weirdor.
     
  17. Gabor Maly

    Gabor Maly Well-Known Member

    Tom, I think the idea of trade journals could work well here....you could set up a special section (Journals) within the forum where those who are interested could start posting their trades and have others learn, comment, advise, etc.....instead of having too many standalone trade related posts.
    Just an idea that could make this forum unique and special to other sites.
     
  18. tom

    tom Administrator Staff Member

    Great idea! I'll try to get that setup today.
     
  19. tman

    tman Active Member

    It's better to be lucky than smart. It's also important to know the difference. Trade down $55 to date. No adjustments yet.
    upload_2014-10-16_22-43-59.png
     
  20. tman

    tman Active Member

    Bought the 2 short calls back for $4.10

    upload_2014-10-23_15-38-3.png
     

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