Help with a mistake

S

shnoon

I'm a new trader who's made a stupid mistake here. I'm not sure exactly what I did at the time but I messed up my iron condors and ended up with some double diagonals. I'm not even sure what double diagonals are. I could have sworn when I hit confirm and send the review thing had very similar numbers to what an iron condor would show..and I'm sure each had a max loss of less then $1000!! On the main screen it shows that I'm down $1300, which I can handle if that's near the extent of my losses. But on the create closing order screen it shows a debit of around $7k for each one. Is this because there's so many days left before expiration? Also when I do the closing order the double diagonals have 3 calls and 1 put? Which I don't understand but that's just could be how they are. Can anyone explain what happened or what I could do to best fix this?
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Thanks
 

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Yeah, this is a monumental mess.

One choice you have is take all of these positions as starting points, and construct new positions around them that make a modicum of sense. DON'T DO IT.

1) Decide right now, what you want to commit to NFLX positions, according to proper capital and portfolio management precepts.

2) Choose those positions you already have, to the $$ limit you decided above, and liquidate the rest A.S.A.P.

3) Construct the new positions you have in mind, subtract the legs you already own, and finish the job.

4) Rest, review what the hell went wrong, write that down in a single sentence, print it in large-ish font, cut it out with scissors, and scotch-tape it to the side of your monitor.

(Let's sum up.)
I. How much capital on NFLX??
II. Which are the most promising positions?
III. LIQUIDATE the rest.
IV. Post your brainfart where you can see it.
 
This is what I see.

-1 NFLX July 20 345/355P, 485/490c Iron condor
-1 NFLX July 20 350/355P, 485/495c Iron condor

-1 NFLX July 27 330/335 call spread
-1 NFLX July 27 340/345 put spread
-1 NFLX July 27 480/485 put spread
-1 NFLX July 27 485/490 call spread

What do you want?

BTW, I would be the most concerned with the 485 puts as they might be assigned and you will end up with 100 shares of stock hedged by the 480 puts.
 
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Robert Morse said:
This is what I see.

-1 NFLX July 20 345/355P, 485/490c Iron condor
-1 NFLX July 20 350/355P, 485/495c Iron condor

-1 NFLX July 27 330/335 call spread
-1 NFLX July 27 340/345 put spread
-1 NFLX July 27 480/485 put spread
-1 NFLX July 27 485/490 call spread

What do you want?
More...


OMG, that is so obvious, once you pointed it out.:rolleyes:
 
Robert Morse said:
This is what I see.

-1 NFLX July 20 345/355P, 485/490c Iron condor
-1 NFLX July 20 350/355P, 485/495c Iron condor

-1 NFLX July 27 330/335 call spread
-1 NFLX July 27 340/345 put spread
-1 NFLX July 27 480/485 put spread
-1 NFLX July 27 485/490 call spread

What do you want?

BTW, I would be the most concerned with the 485 puts as they might be assigned and you will end up with 100 shares of stock hedged by the 480 puts.
More...
Thank you very much for your help
 
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Agree with Robert... unwind the deep spreads first to prevent early exercise. I guess you can autoexercise your longs as offset (right Robert? ) BUT TOS charges you like $20/contract for it.. that will hurt! Look at the deltas anything +- 80 & unwind as a spread then the rest should be manageable. BTW a diagonal is when you are short the front month offset by a long in a back month ex Short 400c /long 405 c with the 405 line expiring later.
 
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