Trade Discussion

IncomeLab Forum Forums Income Lab Trade Discussion

This topic contains 164 replies, has 18 voices, and was last updated by  Igor 3 years, 1 month ago.

Viewing 15 posts - 121 through 135 (of 165 total)
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  • #5474

    Igor
    Keymaster

    Igor, just buy to close the 2155 CALL, or close the 2155/2165 Call Spread?

    #5476

    Igor
    Keymaster

    1 of 10 calls, this will leave a 9X10 Bear Call spread.

    #5478

    Igor
    Keymaster

    OK thank you, I figured it out already by looking at Deltas.

    #5479

    Igor
    Keymaster

    One other thing, what would you do if you have 15 Bear Call Spreads on?

    #5480

    Igor
    Keymaster

    Hi Igor,

    ***housekeeping****

    Just a thought.

    i think that the positions summary should also be updated when you buy back a call (1 x maybe call bought back under the hedges ?)

    #5481

    Igor
    Keymaster

    Andras,

    The goal of this adjustment was to cut NET delta in 1/2. So you can close 1 of 15 and if it’s not enough then buy something OTM to get there.

    #5482

    Igor
    Keymaster

    TY. Should I do it in the JUN03 cycle?

    #5483

    Igor
    Keymaster

    Yes, with 45 days I think it’s fine

    #5484

    Igor
    Keymaster

    just to discuss opening.

    i know we have been busy today but possible diversification over price & time opportunity for June monthly.. something like maybe 1890/1900/2190/2200 looks ok but might be worth doing call 1/2 size to make it more delta neutral

    thoughts?

    #5487

    Igor
    Keymaster

    I dont think going 1/2 size on the upside is a good trade at these levels. I’d rather be proactive defending the upside than taking more risk on the downside after a 300 pt move with little to no pullbacks.

    #5493

    Igor
    Keymaster

    Igor, At what point can we close the hedge and roll the call spreads higher? Once the delta reaches 30? My strikes for June are different so thought of checking.

    #5494

    Igor
    Keymaster

    Yes Nishant, that’s a good indicator to time a roll. You should also pay attention to things like: time until expiration, where SPX is on the chart. For example, if SPX looks like it’s about to make a run for the highs and short delta is at 30, maybe it makes more sense to add a hedge (to flatten NET delta more) and then roll when there’re signs of some resistance coming in.

    #5522

    Igor
    Keymaster

    Igor, a question on the hedging process – when the short option approaches 20 delta and you decide to hedge the position using a further out OTM long option, do you have any guidelines on how far out you go for the hedge? I understand the further out you go in time, the more expensive the hedge gets to cut the same amount of net delta; but you also get the benefit of less theta decay on the hedge. For example, in MAY IC, our hedge is in the MAY5 cycle which is basically a week and half out. Is that what you typically go for; a week or two out?

    #5529

    Igor
    Keymaster

    I like to go anywhere 45+ days out. If we had a position that was 30 days out and I needed a hedge I’d go 45 days out or more. The reason I want at least 45 days is because I plan on rolling within 2 weeks (depending what the mkt does) so from 45 to 30 days that hedge shouldnt get hit pretty hard from Theta decay. That’s the general idea, however there are times where ‘Adjustment’ point is hit and then SPX slows or stalls and I end up holding OTM options a bit longer so decay becomes a problem. In that case I’d consider rolling the hedge out in time, that is if I still planned on rolling the spread that’s being pressured.

    #5531

    Igor
    Keymaster

    Igor,

    Again i cannot buy back a call. So in my case ( 2 lot ) ,

    My current delta is 6.5 and i have an SPY 40 delta (4 delta ) call = 2.5 net deltas

    when I go full size on the Put side making it delta 5 without call hedge or delta 1 with call hedge..

    i guess i could swap my call for 25 delta SPY ? — this is what it would like if i did what i say — looks similar to your p & l

Viewing 15 posts - 121 through 135 (of 165 total)

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