I am investing in a ‘double calendar’ with the stock ticker SPXL (which is based on the S&P 500), which makes money generally if the market goes up by 20% or down by 20% over the next 9 months.
The picture above is the trade.
In text form that is:
-10* Jan 26 SPXL strike 110 put
+10* Jan 27 SPXL strike 110 put
-10* Jan 26 SPXL strike 195 call
+10* Jan 26 SPXL strike 195 call
There are 4 legs in the trade, with the underlying currently at 142.
The cost is $1800 per contract or $18000 total. If all goes well, the trade will be worth about $28000 at the end of the year.
The good thing about this trade is if we drop by 20%, this trade should still be mildly profitable.
If the market is crashing, this trade allows you to close it and get out breaking even as long as you close it during the week of the crash (due to rising VIX).
