Thursday, June 18, 2015

EWG Straddle

JUN 18

Analysis

EWG (Germany ETF) has an 89 IVR.  The stock is trading at 29.12 and IVR is beginning to drop. Selling volatility and theta premium out 30d to expiration.

Trade

-1c (sell) Jul 29/29 Straddle for 1.62/c

-End


Jun 24

Analysis

The short 29 call for EWG is about to go ex-div. With the stock trading near 30, there is risk of assignment and being short 100 shares EWG. While this does not change the overall risk of the position, it does mean more management and having to wait until the sold put decays to offset any intrinsic value in the short shares.

To avoid this, I am going to close the position.

Trade

+1c (buy) Jul 29/29 Straddle for 1.38/c

Net P/L 0.24

-End

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