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December 19, 2013

$AMZN Weekly Trade - 12/19/13

  • Strategy: Iron Butterfly
  • Underlying: AMZN
  • Trade: SELL -1 IRON CONDOR AMZN 100 (Weeklys) JAN2 14 400/430/400/370 CALL/PUT @17.00 LMT
  • Trade Price: $17.00 credit per spread
  • Margin: $13.00 per spread
  • Return on Risk: 130%
  • DTE: 22
Risk Profile:
risk profile
This is a daily chart of AMZN:
AMZN is coming up to retest 400 level. We're entering slightly bullish Iron Butterfly looking for a drift higher (not explosion). We are looking for 10% return on margin as our profit objective and we don't want to lose more than 15% of margin. Points of adjustments are 385 and 415 (price) and when we're down 50% of max allowable loss or $100 (P/L). We will adjust by rolling 'bad' side up or down 30 points. For example, AMZN goes to 385 we will roll 400/370 put spread down to 370/340 and same for the upside. Last few weeks of the year should be slow and that should help our trade reach Profit Objective.