Apr 20 – Rhino M3 Trade Update

June Trades

I didn’t adjust today Update: At 15:40pm the market pulled back so I used the opportunity to enter some orders for Call BWBs and Call calendars slightly higher than the price I paid for the same yesterday. The RUT oscillated between 1137 and 1148 and is sitting right at 1143 right now after a stronger EOD pullback. Yesterday, I added some upside adjustments and we’re comfortable until about 1152 area where I’ll add more to keep theta higher and to prop up that portion of the tent. My plan is to add modest adjustments on any pullback to keep the negative deltas around -20 or so per unit. This will allow for any pullback but also keep theta in the trade and beef up the right side of the tent.

May Trades
All the May trades I had on are now slightly negative P/L. Any pullback would quickly get those profitable. I’d probably start exiting slowly on each pullback while keeping the upside adjustments alive so that the deltas stay around -15-20 per unit. I wish I was a bit more aggressive on the upside adjustments for all May trades, I’d have added more calendars on the call side around RUT 1130. I’ll take any PB as an opportunity to get May more balanced, though like I’ve said, the upside risk is mostly minimal for these trades.

Market
The market looked primed for a small roll-over earlier today but some bogus Oil headlines came out which shot the markets up aggressively. However, we’ve come too far too quickly and the risk is to the downside at these levels. The market will do what it wants, and any technician is merely playing the best odds. The odds favour risk to the downside. Things do look bullish over all, and I’d expect any pull-back to just be a short term thing. If it goes much past 1155, then the market is doing something quite abnormal and extraordinary and I’ll have to consider getting more aggressive with adjustments. Any modest 2%-3% pull back in the next 30 days will get us profitable. I won’t have any gamma issues for my May trades, so it’s likely I’ll stay in longer than 21 DTE in search of a pull back. If we can get the May/June trades profitable that would be a fantastic result.

June Rhino M3 (P)
# of Units: 30
Planned Capital: 750,000
Current P/L: -16,425
Current P/L(%): -2.2

Screen Shot 2016-04-20 at 2.15.42 PM%

June Rhino M3 (D)
# of Units: 16
Planned Capital: 400,000
Current P/L: -9,643
Current P/L(%): -2.4%

Screen Shot 2016-04-20 at 2.15.53 PM

June Rhino M3 (M)
# of Units: 25
Planned Capital: 625,000
Current P/L: -16,206
Current P/L(%): -2.59%

Screen Shot 2016-04-20 at 2.16.13 PM

11 thoughts on “Apr 20 – Rhino M3 Trade Update”

  1. Love your blog! Very inspirational seeing this kind of capital being traded . Curious how you got your start trading options?

    Reply

    1. Hi Jerry,

      Thanks, I thought it might be interesting for people to see larger trades in action since you don’t really get to see many larger lots on other blogs etc.

      I started off at http://www.steadyoptions.com trading earnings volatility type trades. Great place and great community. I started getting into modified iron condors and then found John Locke and started trading M3s/Bearish Butterflies and now I’m mostly doing Rhinos.

      Reply

      2. I think you’d like my version of the BWB. Im actually up 20% so far in 2016. If you would like to see it I can screenshot my setup and trade management to you . I have no risk to the upside.

        Reply

  2. On trade entry what kind of delta number do you like to see per unit. Also, how do you find the liquidity for the broken wing flies? I also trade a variation of the rhino and fills seem to be tough as of late. Thanks, love the blog!

    Reply

    1. Hi Cale,

      Thanks!

      I had a bit of issues with liquidity for the June trade. I tend to scale in over several days with 5 lots (25/50/25). It was much easier to get filled at good prices when the market was moving down instead of up.

      I don’t really aim for a delta number per say, but if I do, it’d be biased to my thoughts on the market. For instance, if I was to enter now, I’d probably enter with a bias towards more negative deltas. When I entered June, I had more negative deltas, they didn’t serve me well but they were still reasonable and the trade was within guidelines. Looking at the profile, I probably should have had a few call calendars or BWBs on as the pricing for the BWB was higher than the recent cycles.

      Reply

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