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Donna zhao ZhaoParticipant
Steve,
Somehow I can’t find the post on the trade below on this thread…May I know where I can find the rest of the email? Thanks…
Adjust SPX Trade
I’m taking off the hedge and rolling the call side higher.
SELL TO CLOSE SPX APR5 2100 CALL @10.50
BUY SPX APR 2080/2090 2110/2120 CALL CONDOR @2.05
SEE THE FULL TRADE HEREDonna zhao ZhaoParticipantI entered the above Iron Condor trade today after messaging you by splitting the Iron Condor up with the call spread entry first, thinking I would get a bigger premium with my call side when the stock is moving up and enter the Put Spread later when the market drops/crashes for a better credit in a week or so. However now I felt out of control because I didn’t actually understand the situation I am in. Please forgive me for my stupid behavior which will cause you extra time and attention.
What had happened today was that I was carried away by the market surge and bought more contracts of calls than I should have, by chasing the market and adding more shares when the price moved up, until I felt I couldn’t afford to chase anymore. As a result I am negative $1700 by now, with the first set of calls with only 2.10 credit. (without buying put spread). My original thought was that by buying more high premium calls I could sell my premium calls on the way down (when market goes down in a week or two). Now I am at loss for not really understanding the concept and am really worried that if I had screwed the trade up. Can you please help me get out this sticky situation?
Currently I own 25 shares of SPX (cost $2.59 per share, $25000 margin, with a market value -$1700.) Please let me know what I should do next…
“If the SPX moves above 1960: then roll the call spread higher by 30 handles and double size. If the market continues to squeeze back above 2000, then buy some calls as a hedge to cut delta. Then if the market squeezes any more, close the call hedge and use those profits to roll the call spread higher, and then roll the put spread higher as well.” I have to admit I didn’t study this note very well until when I felt I was out of control…What a pain I am!!
1: If SPX moves above 1960 on Monday, which can very well happen, what should I do? Should I buy more calls when I have already bought too many shares? Also what is 30 handles?)
2: Should I add my put spread when market goes down on Monday? Or When and in what condition should I add on my put spread? The put spread now has little premium if I am to put on now.
3: What is the longest time frame I can wait to add the Put side of the Iron Condor? (Maybe I had the wrong assumption that the market is going to crash in a week or so like last few weeks, and its better I put the put spread on then for more premium. Also I believed since we have a long expiration until April, therefore I have time to wait to enter the Put Spread. (I understand time eats up the premium)
4: You mentioned the following “also if you do separate it you can use a “blast all” order basically you want to be really, really quick”. May I know what you meant by this? Is it too late to do it on Monday?
5: I have to admit I understand very little Iron Condor strategy and the videos are too technical for me to understand. To me, the call spread (Bear Call Spread) will bring us more profit when the market goes down and the Put spread will bring more profit when the market goes up, if this is true, shouldn’t we buy more call shares of call spread when the market is more likely to head down down instead of up by expiration? (so we collect more premium from the call spread (when the market drops ) then put spread?
Again I am terribly sorry I don’t understand the technical terms about Theta and Gema, etc. and your videos. I thought I could do the learning through trading..But this tells me that I do have to spend more time learning before I become aggressive in trading. Sorry for the trouble I caused you…and sorry for the long email..
Looking forward to your response!
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