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IWB

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3 replies, 2 voices Last updated by John Locke 3 years, 9 months ago
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    • #11850

      John Burrows
      Participant
      @JohnWBurrows@gmail.com
      Points: 204
      Rank: Newbie

      Is there somewhere I can see how you do this? Right now I need to either manually add the deltas and volatility (since I cannot combine two symbols in Optionvue). The other option would be to enter the larger position of RUT puts with a RUT call, but assuming this trade would behave the same as a RUT/IWM position seems like a dangerous way to backtest.

       

      • #11857

        John Locke
        Keymaster
        @john-locke
        Going to The Trading Triangle LIVE 2016Locke In Your Success CoachAPM2Trade JournalsUltimate Income Trader Workshop

        I show an example in the Incremental Adjust ability and Small positions video. I believe there is another in the 2016 program update and possibly in kick starter as well

         

        The analytical software will not combine the 2 assets. So you are correct, analyzing by multiplying butterfly position by 10 and analyzing RUT calls at the companion strike (and then dividing by 10. Is is not optimal however it is the best option we have for analyzing Greeks on a composite position. Actual profit and loss should always be tracked within your broker platform.

         

        The IWM/RUT composite behaves in a similar manner “overall” however there will be individual trades where you my get adjustment point differences and therefore different results in some months however over extended periods of time the numbers even out.

        Also, please note the special IWM considerations I list out in the program regarding dividends and potential assignment on short ITM options.

         

         

    • #11802

      John Locke
      Keymaster
      @john-locke
      Going to The Trading Triangle LIVE 2016Locke In Your Success CoachAPM2Trade JournalsUltimate Income Trader Workshop

      I assume you are talking about IWM/RUT position mix. If so, yes with smaller than $50,000 you can trade an IWM RUT mix or M3U position as outlined in the incremental adjust ability and small positions section

    • #11800

      John Burrows
      Participant
      @JohnWBurrows@gmail.com
      Points: 204
      Rank: Newbie

      My portfolio is smaller than $50K. Does the current M3 methodology still allow for purchasing an IWB call, as referenced in the course?

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