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GOOG Iron Fly : Paper Trade/29% Profit

Published on January 20, 2007

GOOG Iron Fly : Paper Trade/29% Profit

January 20, 2007

Profit from Google options expiration due to pinning, with reference to my earlier post here : As this was my first time to test this, I did a paper trade. I played GOOG via an Iron Fly: sold Jan 07 490call, bot 500 call, sold 490 put, bot 480 put. Overall credit $3.30 at the beginning of the day. After lunch I could have bought it back for $1.30. That is $2.00 return on $6.70 margin. Overall 29% ROM in one day. Since I didn’t capture the screenshot, I can’t share actual prices at opening, but you can check this out in any option calculator. Look at the intraday chart…GOOG continued to play between $486 and $491

GOOG Pin Jan 2007

I will play something similar in the next expiration cycle,
Profitable trading,

2 Comments

  • Avatar Ken says:

    Hi

    Could u tell me whats th difference between Iron Condor & Iron Fly? How do u make money from doing Iron Fly?

    I have been studying Credit Spreads for quite some time & still feel uncomfortable about it as the repair & exit strategies r not clear cut. There’s a mathematical calculation for beakeven for Credit Spreads but they dont work in reality. So I hope you could tell me a good way to repair & exit at Breakeven.

    Thanks
    Ken

  • Avatar OptionPundit says:

    Hi Ken,

    Iron Condor and Iron Fly are both selling credit spreads on both sides (call as well as put). The only difference being, in Iron fly, the short strikes are same for both call as well put legs.

    Thoguh in general breakeven points are quite clear, it changes as the option premium may changes depending upon the Implied Volatility (IV) of individual option….

    There are a lot of ways to adjust vertical spread/iron condor..how about you let me know a specific situation and I shall try explaining..

    Regards, OP

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