New Weekly Income Switch Trade

New Weekly Income Switch Trade

 

I have also purchased a new Weekly Income Switch Trade.  This is buying a further out put as protection, while continuing to roll a weekly option.  

OPEN BOT +1 DIAGONAL COST 100 15 NOV 19/11 OCT 19 290/287.5 PUT @5.26.  Email coming soon, this SHOULD bring in weekly $

So in this trade we are selling to open the 10/11 $287.50 put, and buying to open the 11/15/19 $290 puts in COST.  The total debit here was 5.26 or $526 per contract.  In this new account of mine I am only doing this with 1 contract to start.  I should be able to collect anywhere from $200-$300 a week on this trade giving us a break even in 2-3 weeks.  We then will have 3-4 weeks to collect all cash on this trade, the idea being we continue to roll this out assuming COST and the market work in our favor.  

Once the market stabilizes I will start doing the same thing with other stocks with even further dated options.   But for now, I hope we can settle and allow these types of trades to work.  I used a $290 call because IF the market decides to dump, I want to have great protection on this trade.   Typically, I would buy a put more near the 40 delta for this type of trade while selling the ATM put weekly.

Let me know if you have any questions.

 

Ian