Last week, one put fly did most of the work

Here’s how the Alpha Generation Portfolio finished last week: up 3.04%, thanks mostly to one well-timed SPX put fly.

I’ll go through the three books, because the bits that didn’t work are probably as useful as the bit that did.

Delta

The existing positions continued to bleed a little, though most have limited premium left.

On Friday, after poor tech earnings reactions and overnight weakness, I used a put fly to lean short from the open. I monetized it for decent intraday gains, going into month-end and ahead of the midterm uncertainty.

That one trade more than offset the decay elsewhere and left the Delta book up on the week.

Theta

I’m still holding the TLT iron condor. I rolled it to 20 November because I had limited confidence it would get back in the range by the end of the week. Bond yields look to be in a consolidation zone, so the structure may still work into November expiry. We’ll see.

I also added a Russell Flyagonal. Russell vols looked cheap enough to lean long vega, and after the bounce back into the range there’s scope for sideways action, even if the tech sell-off continues.

Vega

I monetized the silver straddle for around $500 (38%) as silver broke down to the downside target, and closed the URA straddle near break-even.

Then I added a bunch of VIX puts and put structures into the Friday spike, with the VIX briefly near 24. My view is that the low-vol regime is likely to persist, and this mid-vol move should reset lower after the midterms and into Thanksgiving. I could be wrong on that, so we’ll see how it plays out.

So that’s a small bleed in one place, a condor that needed more time, a straddle that went nowhere, and a short-term trade that paid for the lot. For me that’s what a normal week looks like when you’re running three books side by side.

How those three books fit together is why I always trade out of a framework as reference. What I walk through in the masterclass gives you some insights into my framework. Free 60 minutes, linked below.

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If you want to skip the masterclass and jump straight into our course, the Options Insight Advantage, this is the link. It comes with three months in the Alpha Pod, where I walk through the rationale behind trades like these as they happen.

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