Here is this month’s Glimpse of Genius trade.
Glimpse of Genius is a free service where we share one delta neutral/option selling trade a month so that you can see how these trades work in real time. We do these “live” and you can sign up to be updated by email whenever we adjust or exit the trade. To sign up for these email alerts Click Here.
Here is a simple butterfly spread on this etf.
As you can see from the image, the breakevens are about 31.4 on the high side and 28.7 on the low side. We want XHB to stay within this range. If it does, the trades gains value everyday. If it does not, an adjustment would need to be made.
Here’s the trade:
Buy to Open 1 Nov 27 Call
Sell to Open 2 Nov 30 Call
Buy to Open 1 Nov 33 Call for a debit of 1.80