Buying call spread without closing exisitng position

C

clarodina

Anyone knows put on multiple call spread?

Say you buy a 24 call and sell a 26 call and price move up a dollar to 25 and buy a 25 call and sell 27 call Price move up a dollar to 26 and want to buy 26 call and sell 28 call

But the problem is 26 call has sold in the first trade and now buying 26 call would close out the option position at 26 How to carry on buying without closing out those open trade
 
You have to close. You can keep both a long and short position on the same option. Why does this bother you?
 
clarodina said:
Anyone knows put on multiple call spread?

Say you buy a 24 call and sell a 26 call and price move up a dollar to 25 and buy a 25 call and sell 27 call Price move up a dollar to 26 and want to buy 26 call and sell 28 call

But the problem is 26 call has sold in the first trade and now buying 26 call would close out the option position at 26 How to carry on buying without closing out those open trade
More...




Once (If) a debit spread has reached the short strike there is no reason to keep the trade open - close it and move on to the next trade. There is no reward left in an ITM debit spread, but lots of risk.


:)
 
If you for some reason really want to keep the $2 wide strikes, and are uncomfortable with keeping up with what you intend on a spreadsheet or somewhere (since the broker would close our your 26 strike contracts); You may consider different accounts or different expirations to keep from stepping on your existing positions. This sometimes occurs with some option strategies that have lots of "adjustments". Typically in this case, you pre-plan to insure you never step on your positions.
 
There is some kind of mental block people have with this concept that having two equal and opposite positions open gains you nothing over being flat. You see it all the time with forex people, who call it "hedging" not knowing what that really means and can't be convinced that paying double the commissions to achieve exactly the same result is suboptimal. Some of them even sued after the NFA banned forex dealers from allowing it, saying they were losing opportunities for profits, not sure how you could show a scenario where that was fact. I'd be curious to know exactly why this concept is so hard to grasp, there must be something about standard human brain wiring that makes is counterintuitive somehow.
 
clarodina said:
Anyone knows put on multiple call spread?

Say you buy a 24 call and sell a 26 call and price move up a dollar to 25 and buy a 25 call and sell 27 call Price move up a dollar to 26 and want to buy 26 call and sell 28 call

But the problem is 26 call has sold in the first trade and now buying 26 call would close out the option position at 26 How to carry on buying without closing out those open trade
More...

If you are expecting that the underlying will go from 25 to 26 when you have a 24-26 call spread on, why not just continue to hold the 24-26 spread? It sounds like you want more positive deltas on - so you could just also sell a put, buy stock, sell a put and use that to finance a longer OTM call spread, etc.
 
OTM-Options said:
Once (If) a debit spread has reached the short strike there is no reason to keep the trade open - close it and move on to the next trade. There is no reward left in an ITM debit spread, but lots of risk.


:)
More...

Huh? There may be plenty of risk, but to say there is no reward is lunacy. What debit spread reaches maximum profit with the underlying at the short strike except at expiry?

It seems the OP wants to keep compiling risk by adding more spreads, which would seem to me to be less than ideal. There are certainly a variety of options -- take the profit (however meager), take the profit and roll up, maybe convert to a box?
 
You must log in or register to reply here.
Back
Top