I've opened a LONG CALL VERTICAL spread yesterday end of day for Dow Jones.
Correction maybe consolidated, I'm expecting some short squeeze soon.
Otherwise the probability of profit is godd, and the trade is manageable because of lower strikes.
(1) Relative Implied Volatility is low
I'm using my Relative implied volatility indicator to determine the credit/debit type of option trades. Low relative implied volatility justifies debit option strategy (longing options) instead of creadit strategy (shorting options)
(2) Neutral RSI - no oversold or overbought
Uptrend still holding after a quick correction. My Smooth RSI indicator is in no one's land. There is plenty of room up and down.
(3) Observing other Down Jones instrument
Every Down Jones instrument pretty same indicator values for RSI and RIV too: DJI, YM, DJIA, DIA
CONCLUSION:
I'm using LONG CALL VERTICAL -
Buy 1 DIA April16' 305 Call
Sell 1 DIA April16' 310 Call
Debit call spread for 3.92 debit
Probability of Profit: 67%
Profit Target relative to my Buying Power: 26%
Max profit: 105$
Max loss at expiry: 395$ (Buy Power)
Max loss with my risk management: ~120$
Tasty IVR: 3.1
Expiry: 38days
Stop/my risk management: Closing immediately if daily candle is closing below $309
Take profit strategy: I'm taking at the 55% of max.profit in this case with auto sell order. (at 4.55 debit)
If you liked this article, check my other ideas. Anyway: HIT THE LIKE BUTTON BELOW, and follow my fresh ideas ( @mrAnonymCrypto on tradingview ).
거래청산: 타겟 닿음
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Successfully closed today in 64$ profit, in 7 days. Take profit target reached. 16% on my capital in one week. I like trading indices..
Good trade! Even in 3 weeks the break even historically gets hit only ~10% of the time which will give you a solid positive expectation especially considering your management. Guessing your win rate in mid 80s%+ and average profit per trade ~upper 30S+. I do something similar to this only usually on SPX. Interesting thing about this is is has Theta decay close to the more popular but far more risky put credit spread. Thanks for sharing this great low IV spread and keep smiling!
TanukiTrade
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@Tom1trader, Thank you for the appreciative words. Yes, this is mutch stressless than other option trades. I have ~85-90% win rate, and avg 50% of max profit - so in this case ~50$ fix profit target. SPX is great for these type of trades too, but any other large incides too.
Feel free to follow me on tradingview for any option trade analysis in the future ❤️
Tom1trader
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@mrAnonymCrypto, You are welcome, this becoming a bread and butter trade for me and your management notes are useful! Have already followed you - I was just looking at recent VXX -it is not an alternate VIX, my play on it is always short (and small) as it repeatedly wastes to a low level then reverse splits - but good luck with it.
TanukiTrade
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@Tom1trader, absolutely you have right, thank you for the critique, the VXX trade was not the best! I hope the all time low level affecting a little bit sideway or bounceback. We will see!
UnknownUnicorn12285430
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To far into future...
TanukiTrade
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@aiart, ? Im not holding more than ~14days in average any position....
My point to stay profitable is: above the green line for 14 days ;)