dest's overwrite journal

[destriero]

I am short the calls (8x100) in Jan against the shares.

(the 120 calls) 8 per 100 shares.

 

[horizon]

(the 120 calls) 8 per 100 shares.

So how many delta are you long?

 

[destriero]

So how many delta are you long?

I am net short.

 

[horizon]

I am net short.

So you are somehow bias bearish the shares will go down?

 

[destriero]

So you are somehow bias bearish the shares will go down?

No, just that I won't lose (much) if it does. I am fine with a drift up to 120 by JanExp.

 

[yc47ib]

(the 120 calls) 8 per 100 shares.

You mean you shorted 8 contracts of 120 calls for every 100 shares of stock longed to hedge? Thank you.

 

[cesfx]

No, just that I won't lose (much) if it does. I am fine with a drift up to 120 by JanExp.

Destriero, how would you manage this overwrite on the way up?

Would you hedge delta, or exit the position at a specific price, like if it breaches or touches 120?

 

[destriero]

Destriero, how would you manage this overwrite on the way up?

Would you hedge delta, or exit the position at a specific price, like if it breaches or touches 120?

I don't think that 120 is in the cards. I will hold it to expiration.

 

[emulimu]

I would (have) traded this as a 3400/3500/3600 132 calls for Sep17 as a small credit looking for the delta drift (initially neutral) as it gains delts with time. It will gain on vol-position (which leverages drift).

Anyway, it traded at a small cr this morning. I did something similar but wider strikes and a bit more risk.

How would you have managed this? As soon as AMZN comes close to around 3335, You would have to pay a large debit to get out of this position. Also, what's the rationale of putting this short vega position when the IV is so low, if you don't mind answering?

 

[destriero]

How would you have managed this? As soon as AMZN comes close to around 3335, You would have to pay a large debit to get out of this position. Also, what's the rationale of putting this short vega position when the IV is so low, if you don't mind answering?

lol.

It's up $4 marked. $180cr to 220db