FB Strangle Trade

This is another example of using small sized strangles as an income strategy.  This is an Aug 27/39 Strangle in $FB.  The trade was opened on 6/27 for a .95 and .70 credit on the two strikes.  Implied Volitility for August was at 62%.  These two strikes were selected at the 20 Delta level.  The area on the risk graph is very wide giving a good chance for being successful.  One week after putting the trade on there’s approximately a 30.30% gain due to Theta and a 5% reduction in volatility.

 

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