I trade a lot of DITM put spreads. For the short side I also look at open interest. I like to see at least 1,000 open interest and at least .40 ex value or more. Once open interest falls below 500 and ex value is .20 or less, look forward to an early exercise.
Joe.
Please correct me if I am wrong but this is my understanding of what you wrote.
It appears to me that you were bullish on PVH when you bought the 60 calls. But now you have converted that into a bear call spread to "cover" your "loss". My concern is, did you really change your outlook on PVH...
"Therefore, in the long run, theoretically, constantly selling straddles, with no adjustments, you will end up even."
Minus commissions and spreads.
Joe.
Did you mean $1.35 credit?
Using a probability calculator, there is a 90% chance that the stock price will touch $17.50 and only a 50% chance that it will close above $17.50. Do you have a plan for what to do if that happens? This appears to be very risky to me unless you have a very good...
I have been reading about the difference between American and European exercise but I am not clear on the risk.
What is the risk of doing a debit calendar spread on the OEX because it has an American exercise?
Thank you.