I had opened a Credit Put spread 10/15 on DBVT with a, in retrospect huge risk of 423$ / contract. Sure DBVT is trading above 40$ but someone is willing to pay more than a Dollar / contract to have the right to sell DBVT at 10$.
Talk about something being fishy here. It’s a biostock and it smells.
I have no idea what’s the case, but I know, a regular stock trading at 40$ has no puts at strike 10 paying more than a Dollar.
So, that risk I took, looks no longer fair to me. On the other hand DBVT is trading above 40$, I will not take a loss on that trade, because I feel uncomfortable with the trade.
Let’s try and bring the risk down.
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Here you see my DBVT Credit Put spread…
I feel uncomfortable…
Let’s make an iron condor out of that Credit Put spread.
Sell the 40/50 Credit Call spread for a sweet 6.05 / contract, which brought my risk down 75%.
Let’s tweak it even further, Optionanalysis.com really spoils one
Trying to add an iron condor inside the existing spread, did not work yet.
I got no fill!
Maybe I need to try to add the legs individually. That might work. Will see today.