LQD Broken-Wing Bear Call — 2026-10-30

LQD (iShares iBoxx $ Investment Grade Corporate Bond ETF): $292K of buyer-initiated unusual put flow (100% put-dominant), IV rank 61 (elevated). Our gamma model reads LQD in a NEGATIVE-gamma regime (net GEX -11.7M, flip —) — dealers are short gamma and amplify moves, so this is defined-risk only and leans with the flow. Structured as a Broken-Wing Bear Call (sell $103.5C / buy $104.5C) expiring 2026-10-30 (14 DTE) — negative-gamma (trend/gap risk) → defined-risk broken-wing leaning with flow. Net credit $39, max loss $61 (defined risk). Breakevens $103.89.

Underlying: LQD @ ~$103.39 | 2026-10-30 (14 DTE) | Net credit (entry): ~$39 per spread. Use limit orders at the mid or slightly better.

ENTRY: Put on the broken-wing call spread: sell the $103.5 call, buy the further-OTM $104.5 call with a WIDER gap on the far wing, expiring 2026-10-30 (14 DTE), as one order at a LIMIT of the mid or better — target net credit $39. IV rank 61 is elevated — premium is rich, a good backdrop to SELL; any vol contraction adds to the win. The skew removes downside risk while collecting a credit; the upside gap is the residual max loss ($61). | TAKE PROFIT: Buy it back to LOCK IN gains at ~50% of the $39 credit. Also close on TIME: exit around 21 DTE regardless of P&L to sidestep the late-cycle gamma/pin risk near LQD's short strike(s) — currently 14 DTE, so plan the exit 0 day(s) out. Below $103.5 the whole credit is yours — take profits, don't carry the tail. Breakeven $103.89. | IF TESTED: The risk is a sharp rally into the wide wing. When LQD tests the $103.5 short call (delta ~0.30) or loss ≈$78, roll the structure UP and OUT ~7–14 days for a credit, or buy an extra long call to square the wing into a symmetric (fully defined) spread. Treat a close above the $104 call wall as the hard trigger to act (the resistance magnet has broken). dealer gamma is NEGATIVE (vol-amplifying) — moves accelerate here, so defend one trigger EARLIER than usual and don't wait for the strike to go in-the-money; put wall (support) at $102; call wall (resistance) at $104. If price reaches the $104.5 wing, you're at max loss ($61) — take it. | MAXIMIZE: Holding below $103.5? Let theta collect the full credit. Once most is banked, roll down toward the money next cycle for a richer credit, or add a put spread to convert into an iron condor if flow turns two-sided.