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Creative ways to salvage a vertical spread.
- Thread starter MathAndLogic
- Start date
Quote from ammo:
your short the 116 call and long the 119 call, you short the 119 put and buy the 116 put, now u have a box ,( short 1 diagonal,long another).that willl always be worth 3,then you scalp in and out of the legs for 5 and 10 cents til its back up over 3 ,or cover the 116 calls while rallying and put them back out when we reach the next resistance, when dow hit yesterdays hi this morning you cover the 119 call and put it back out when we drop to 57 on the es, or cover the 116 calls down there and now you need to leg out of the put sprd, if your call legging amounted to u buying the call sprd for 1 1/ 2 and the put sprd is now 1 1/4 u just buy it back and u are out of the position at 2 3/4 , you can always sell the same put sprd and u have a box that wont move in value, i f spy is at 120 the call sprd is worth 3 and the put sprd zero, if spy is at 112 the call sprd is at zero and the put sprd is 3....you can use this box tool to always lock up your position overnite or during sideways action , or you scalp in and out of 1 of 4 legs , whichever seems at the money and reacting the most to the market at the time,volume wise
Ammo, you the man !!!
Thank you !!!
Ammo,are you being serious??
Quote from ammo:
your short the 116 call and long the 119 call, you short the 119 put and buy the 116 put, now u have a box ,( short 1 diagonal,long another).that willl always be worth 3,then you scalp in and out of the legs for 5 and 10 cents til its back up over 3 ,or cover the 116 calls while rallying and put them back out when we reach the next resistance, when dow hit yesterdays hi this morning you cover the 119 call and put it back out when we drop to 57 on the es, or cover the 116 calls down there and now you need to leg out of the put sprd, if your call legging amounted to u buying the call sprd for 1 1/ 2 and the put sprd is now 1 1/4 u just buy it back and u are out of the position at 2 3/4 , you can always sell the same put sprd and u have a box that wont move in value, i f spy is at 120 the call sprd is worth 3 and the put sprd zero, if spy is at 112 the call sprd is at zero and the put sprd is 3....you can use this box tool to always lock up your position overnite or during sideways action , or you scalp in and out of 1 of 4 legs , whichever seems at the money and reacting the most to the market at the time,volume wise
100% serious, you sell the bigger diagonal, you let the premium come in, you buy the smaller diagonal near the close,that box be it a 3 ,5 or 20 dollar box will always be worth only that,its a 4 legged neutral position that you either scalp ,adjust on mornings for premium erosion(lift the long diagonal), adjust for volatility expansion(lift the short diagonal),trenddays(lift the losing leg of the put or call sprd),a lot of possibilities,and u can easily get neutral at any time,its just that on the floor the cost of getting in and out is minimal, out here its at least twice the price with commissions
sell 110 calls @ 6.40, sell 120 puts @4.55... total $10.95....buy 120 calls .42 buy 110 puts .53 ...total $0.95 sold 10.95 ...bought .95, sold 10 dollar box for 10,,,,spy at 100, put sprd worth 10 , call zero, spy at 150 , call sprd worth 10 , put sprd worth o, box will always be worth 10, options will always be adjusted to this price