Forum Replies Created
-
AuthorPosts
-
ColinParticipant
When you put this non standard IC a couple weeks back, were there particular conditions that existed that made this a good trade? As it turned out there was a quick profit on it. Are the conditions still right for a similar trade today or was there something specific at the time that made it more appealing?
ColinParticipantWhere do you put your max allowable loss on these trades?
ColinParticipantWhat’s your plan for managing downside risk on this position?
ColinParticipantIgor, I missed out on your buyback on Friday and still have full size on the put side. Is it a good idea to chase these since the mid is now around $2.10? Or would there be a better strategy at this point?
ColinParticipantIgor,
We appear to have a fairly strong rally happening in SPX currently as is breaking above longer term resistance. The spread you recommend is only showing about 0.80 right now and will not likely bring 1.00 unless there is a pullback. Is it more important to get those strikes or should we move them up a little bit to ensure that we get a fill on the put side? As it stands if SPX continues to rally we won’t have a put spread to sell at all to help cover a roll higher on the call side.
ColinParticipantThanks Igor, that does make sense. Do you suppose this adjustment strategy would be able to be added to the framework?
ColinParticipantThis hedge strategy is not really mentioned in your framework so is this just more of a ‘feel’ adjustment? I can understand that you suspect SPX may be ready to rally and don’t want to be exposed to upside risk. At the same time it does not appear that your rules for adjusting have been met yet (short call delta is not yet 20). I just want to understand why this adjustment at this time.
ColinParticipantIgor, I have a few questions about this trade. In the past you have talked about buying hedges that are further out in time than your IC strikes to minimize the time decay relative to your IC yet this time you are going with the same expiry. Why are you using this expiry? The short strike on the call side is not yet at 20 so why have you chosen this time to add the hedge? Is this done because of the pullback in SPX today enabling a cheaper entry into the hedge? Can you diagram your calculations of net delta and review why it is important? I’m still a bit unclear on that point.
Thanks
ColinParticipantIgor,
When do you plan on putting on the next IC? From what I’ve observed you generally go every couple weeks at about 60 DTE. If you do that here you would be going with July 5 weeklies and that would put you out of sync for the August monthlies. Do you like to keep in sync with the monthly options or is that not a consideration?
ColinParticipantIgor, why do you open half size on this with the intention of rolling to full size later instead of opening at full size but half the credit per spread? If you’re planning to roll it anyways that means an extra trade and more commission. Would you not end up with the same thing either way?
In this case you open 5 2150/2160 for 1.10 ($550-commission). You could also open 10 2165/2175 for .65 ($650-commission) or 2170/2180 at .50 ($500-commission).
In the event of a roll would you not end up at one of those places anyway and end up with an extra commission paid? Or is there an advantage or different strategy here that I’m not seeing?
Thanks
ColinParticipantAs the market continues to move up here, should we be looking to hedge with a call buy or some other strategy to limit upside risk? If not now, at what point would you want to do so?
-
AuthorPosts