VXX Bearish inclined Naked Calls 1 Apr Expiry (Apr Track 1)

Whats The Plan/Trade/Thought

• I purposely ended my March trades last week because I felt this week would be super volatile given the Fed announcements on interest rates. This play turned out well as I got to write VXX calls that end 1 Apr at an amazing price
  
• On the 15 March, I noticed that the VXX had stopped correlating with the market and I believe this had to do Barclay suspending new share creations of their VIX Short Term futures ETN (VXX). In a statement, the bank said it ran out of issuance capacity for the two products and would halt new creations indefinitely. It claimed the halts were not a result of the war in Ukraine
  
• This divergence, allowed me to quickly write VXX Call options that expires 1 April at $3 a contract. I decided to use a smaller Margin (50k) because it is still a VUCA global situation and I wanted to have room to maneuver. I have also never seen the VXX diverge so drastically before.
  
• I also believed that the Fed’s announcement would already be factored in to the past weeks and current volatility
  
  I Feel
  
• Pretty damn good, the VXX as aligned back to the market and right now the market is pretty bullish. Lengthen my distance to strike.
  
  Imagine Yourself Taking The Other Side
  
• This trade is very opportunistic in timing and volatility. There is no way I would take the other side given the price movement.
  
  Imagine Yourself As A Neutral Observer
  
• The risk of this was the unknown of why the VXX was diverging from it’s original intention and what the implications where.
  
  Look For New Information
  
• I did a search to understand what was going on with the VXX, but I decided that it was better to look and based my decision on the current sentiment of the market.
  
  How Do I Feel Now
  
• I am very very happy with this play as it mitigated risk by having a shorter time frame, high contract price and also leveraged my understanding and tracking of the market’s key events.
  
  Trade Specs
  
• Sold 60 Calls @ 3.00 - Strike 58
  
• % to Strike 41%
  
• ATR 98%
  
• BP used 51k
  
• Max Gain: 18k
  

Zlecenie aktywne:

I added on 250 written calls to this trade that uses the same $58 strike but ends one week later on the 8 Apr. BP used was USD 63k and est gain is USD 10,750. I wanted to find another counter but at the present moment I did not see any good opportunities and so I decided that a Broad Market bet with a near term expiry was safer.

Zlecenie aktywne:

I added 170 written calls to this trade that ends 1 Apr. BP used was 69k and est gain is USD 7140. The VXX spiked in the US am and I took advantage of the price spike with a 4 day expiry to limit risk.