CL Redux

Quote from DarthSidious:

Speciaul_K, Thanks for the heads up on the vol. question for CL. Got an idea, and have put on a paper trade to see how I do. I have not traded CL much before, and need to test this out to see how I do hedging this.

Position: Sold a 75P & 75C for total $2.5k credit. Expiry this wed 17th.
Strategy: Do nothing as long as CLH0 is between 74.5 & 75.5. Above 75.5 I will go long one paper contract to hedge, short one below 74.5. I need to not get chopped to death around 74.5 & 75.5 area
Risk: Large gap up/down > large paper loss.

Let's see - I have 250 tick credit to manage this till wednesday - I make whatever is leftover. If this works out okay, I might start doing something similar monthly, depending on how volatility is from month to month.

Comments?
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Bit tight. People do similar but with a wider spread. Such as 72p 77c
 
Quote from Speciaul_K:Bit tight. People do similar but with a wider spread. Such as 72p 77c
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72p 77c Short strangle, about $500 credit (maybe a bit more - bid/ask spreads on deep OTM are bad at this time), but position is easier to manage.
 
My 75 short straddle paper trade: my standing stop order at 74.50 got me short at night. Now have 74.50 buy stop pending.

PS: I actually took a paper position of 5 straddles, not one. The 5 calls & 5 puts have a position delta of 1.36 or so right now. It is probably better to just hedge the delta instead of the wide band stop strategy I am following, but I do not have the software setup to manage delta like that on an ongoing basis. Any software for retail traders that would let me do that?

pos: -5 75C, -5 75P, -5 CLH0
 
Quote from EON Kid:

Nice start, lets keep it green!
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Thanks but I'm afraid I won't be able to cover for ya today. Too damned tired. If we don't get a sizable move by 9:30 CST, I think I'll hit the sack.
 
Quote from schizo:

Thanks but I'm afraid I won't be able to cover for ya today. Too damned tired. If we don't get a sizable move by 9:30 CST, I think I'll hit the sack.
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Inventory is today at 11am est
 
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