I have a rough time when trading TLT options. The setups always look good, the prices are too. So I jump in, and TLT goes where I want it briefly. Then it turns on a dime after giving me a taste and pounds against me until I get out for a loss.
This time, I sold some puts just underneath some strong support at 129.50, the 4/17 127/129p spread for 0.53. TLT has been hanging out right around that support point for about a week, and since the options I'm in expire this Friday, sudden movements cause wild swings in option prices.
Today TLT jumped up 1.35% and the option values tanked 75%. My spread was valued at 0.37 as of yesterday's close and today I closed it at 0.10 for a 75% gain.
Thank you TLT!
In other news, USO is also hanging out just underneath 19, where the call side of my 5/1 iron condor is. Volatility is dropping in USO and time is passing, which is offsetting its slow rise towards 19. Hopefully USO dips a little before the end of the week and then I can hop put of this position alive.
**I have decided to get out of USO at a scratch. If she breaks above that resistance, she's screaming higher. With only weeks to expiration, better take what I can get and move over. I will instead get ready to trade a breakout. A scratch is acceptable because the PoP was only 52% to begin with.
Out @ 0.38 +$20.
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