Thursday, March 20, 2008

ADJUST: USO BRCS to Iron Condor

Ok I am readjusting this USO again for added security by turning it to an iron condor.

I traded in my Apr 90 for and Apr 87 so now I have a BRCS at Apr 87/91. I got a credit for this for $0.62.

Then I added a BLPS Apr 77/73 puts for a credit of $1.12.

If my calculations are right, I have reduced risk and increased potential yield as follows:

Original debit of time diagonal: - $1.65
Converted Mar 90 to Apr 90 for a credit of: +$1.35
Traded my Apr 90 for Apr 87 for a credit of: +$0.62
Sold a bull put spread Apr 77/73 for credit of:+$1.12

So my net credit is now $1.41

My risk is now 4.00 (diff. between spread strikes) and 1.41= $2.59

1.41/2.59= 54.4% max profit

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