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Matthew Whiz Buckley
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Matthew Buckley is the founder and CEO of Top Gun Options LLC and a Managing Partner at Wealth Creation Investing LLC. Matt was formerly the Managing Director of Strategy for PEAK6 Investments, L.P., one of the largest volatility arbitrage options trading firms in the country. He was the founder... More
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  • Advanced FFIV IC Trade Alert 0 comments
    Aug 30, 2012 4:01 PM | about stocks: FFIV

    Strategic Mindset:Market Neutral with possibilities of Surges in Volatility.

    Target:FFIV trading @ $97.76

    Commit Criteria: FFIV Implied Volatility is overpriced relative to its forecast volatility of 8.57% over the trade period. We are looking for possible price movement but for it to stay within its $85.00 to $110.00 price range until the exit of this trade.

    Tactic: Opening 7 FFIV September 2012 Iron Condors (strikes [80/85/110/115]) for a $0.79 credit

    Tactical Employment of Iron Condor:

    - Buying to Open 7 FFIV Sep 2012 $115.00 Calls

    - Selling to Open 7 FFIV Sep 2012 $110.00 Calls

    - Selling to Open 7 FFIV Sep 2012 $85.00 Puts

    - Buying to Open 7 FFIV Sep 2012 $80.00 Puts

    - Net Credit: $79.00 per Iron Condor for a total of $553.00

    - Max Gain: $553.00

    - Max Risk: -$421.00 per Iron Condor for a total risk of -$2947.00

    Mid-Course Guidance:

    We will be watching for a price movement near the short strikes. As the short strikes are threatened we will adjust the Iron Condor as necessary.

    We don't want trade expectancy dropping below 2.00%. Based on this we have two price targets at which we need to consider an adjustment. FFIV trading below $90.48 and above $101.79 are triggers for adjustment.

    Profitability Target:

    We will wait for this Iron Condor to expire worthless taking the $553.00 credit as profit.

    Exit Tactic: We will wait for this Iron Condor to expire worthless, adjusting as necessary.

    Disclosure: I am short FFIV.

    Additional disclosure: We are looking to enter this position in our Advanced Model Portfolio at Top Gun Options

    Stocks: FFIV
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