Buy or Sell This Condor?
- Thread starter Altavest_Erik
- Start date
I'll play --
so, if only given the buy/sell choice, yeah, I'd sell.
But as I write this:
$1.30 IC = 60¢ puts + 70¢ calls.
puts short-δ = -0.09, vertical-δ = -0.015
calls short-δ = +0.06 vertical-δ = +0.028
----------------------------------------------------
position-δ = +0.013
But if I went to Sept.28, at the very same strikes, I could get
$0.80 IC = 45¢ puts + 35¢ calls
puts short-δ = -0.06, vertical-δ = -0.019
calls short-δ = +0.04 vertical-δ = +0.019
-----------------------------------------------------
position-δ = 0.000
So, I can get 60% of the revenue, for a fraction of the position risk, AND get an |increase| of position-Θ from -0.11 to -0.14, "Oh Yay, Team!!"
Same thing plays out, FWIW, if you go to equivalent δs....
So, Rinse&Repeat, and whether you're holding to expiration or not, you're nearly doubling the original theta.
so, if only given the buy/sell choice, yeah, I'd sell.
But as I write this:
$1.30 IC = 60¢ puts + 70¢ calls.
puts short-δ = -0.09, vertical-δ = -0.015
calls short-δ = +0.06 vertical-δ = +0.028
----------------------------------------------------
position-δ = +0.013
But if I went to Sept.28, at the very same strikes, I could get
$0.80 IC = 45¢ puts + 35¢ calls
puts short-δ = -0.06, vertical-δ = -0.019
calls short-δ = +0.04 vertical-δ = +0.019
-----------------------------------------------------
position-δ = 0.000
So, I can get 60% of the revenue, for a fraction of the position risk, AND get an |increase| of position-Θ from -0.11 to -0.14, "Oh Yay, Team!!"
Same thing plays out, FWIW, if you go to equivalent δs....
So, Rinse&Repeat, and whether you're holding to expiration or not, you're nearly doubling the original theta.