This strategy involves selling a call option at a certain strike price and buying another call option at a higher strike price. Both options have the same expiration date. This strategy is used when the trader expects the underlying stock to fall moderately within a certain range (staying below the lower strike)
- Buy to Open TLT 15-Sep-23 98 Call
- Sell to Open TLT 15-Sep-23 93 Call
This is a bearish credit call spread on TLT with an expiration date of September 15th, 2023. Here's a breakdown of the trade:
1. Strategy: A Bearish Credit Call Spread is a bearish strategy that involves buying a call option and selling another call option with a lower strike price on the same underlying asset and with the same expiration date. This strategy is used when the trader expects a moderate decline in the price of the underlying asset.
2. Trade setup: In this case, the trader is buying to open a call option on TLT with a strike price of $98 and selling to open a call option with a strike price of $93. Both options expire on September 15th, 2023.
3. Premium and risk: The trader is receiving a net premium of $1.78 per share, for a credit of $178 (since each contract represents 100 shares). This is also the maximum profit of the trade. The maximum risk is $322, which is the difference between the strike prices ($5) minus the net premium received ($1.78), multiplied by 100.
4. Breakeven point: The breakeven point at expiration is $94.78, which is the lower strike price plus the net premium received.
5. Implied volatility (IV) rank: The IV Rank is 30.42%, which is above 20% which we use as an indicator on whether to sell or buy premium.
6. Days to expiration (DTE): There are 28 days left until the options expire.
2) Neutral on the 10yr yield - neutral on TLT - iron condor