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in FB calendar but now up ~15% any adjustment suggestions?
- Thread starter nixodian
- Start date
Quote from nixodian:
thanks for reply GregLoehr
synthetic long put? so you suggest being assigned and being short FB at 26.5 while still being long the aug9th 26.5c? how could a profit be realised?
l noticed l am in another synthetic put, short 40 SPY @ 166 and long a 26july 168call, its time value is quickly evaporating, would l close this now, by going long 40 SPY and sell the 26july 168call?
thanks again
Not suggesting anything with regard to taking assignment. Just pointing out that doing so would give you a position resembling the Aug9th 26.5 put. This position would profit just like a 'real' Aug9th 26.5 put would profit, which means it would need a drop in the stock.
As for the SPY position, it's not a synthetic put. To create a synthetic with the stock you'd need 100 shares of short stock versus the call. To close it, you would do just as you suggest. To close any position, you just do the opposite of what you did to get in.
Cheers.
Quote from nixodian:
the reg Aug exp having more time being the reason to close now or / and you think its more likely for FB to decline from here? yes agree, calendars round earnings, is something were usually told not to do
Right..IF you had a regular Aug option not the weekly then yes it would be still profitable. No opinion on FB however looks like it might be lower this am. Still if it were me I'd be closing and taking the very small loss. If you still like FB then re-establish a Sept13/Aug1 30ish calendar. planning a couple of rolls. It usually takes 2 rolls to get to BE.
Quote from GregLoehr:
Not suggesting anything with regard to taking assignment. Just pointing out that doing so would give you a position resembling the Aug9th 26.5 put. This position would profit just like a 'real' Aug9th 26.5 put would profit, which means it would need a drop in the stock.
As for the SPY position, it's not a synthetic put. To create a synthetic with the stock you'd need 100 shares of short stock versus the call. To close it, you would do just as you suggest. To close any position, you just do the opposite of what you did to get in.
Cheers.
I was told by IB that I was assigned, does it not matter what price FB was at when l was assigned, IB just sent me an email on date of assignment being left clueless the time and being told only need to know the exercise price. true?
kindly clarify the advantages or disadvantages if l just sell the 26.5c Aug9th and buy back the short 100 (@26.5) OR just exercise 26.5c Aug9th? what would an experienced / veteran option trader choose?
since it is like a 26.5put, l gain if it drops below 26.5 , l still find it difficult to understand this concept since l am holding a 26.5call aug9th which will see its value decline.
if fb declines I profit? this short is also costing me interest taken by IB. I entered the calendar at $16net on July 23rd , l thought that was my maximum loss, indeed it was very much that even as FB shot up.
Quote from nixodian:
I was told by IB that I was assigned, does it not matter what price FB was at when l was assigned, IB just sent me an email on date of assignment being left clueless the time and being told only need to know the exercise price. true?
kindly clarify the advantages or disadvantages if l just sell the 26.5c Aug9th and buy back the short 100 (@26.5) OR just exercise 26.5c Aug9th? what would an experienced / veteran option trader choose?
since it is like a 26.5put, l gain if it drops below 26.5 , l still find it difficult to understand this concept since l am holding a 26.5call aug9th which will see its value decline.
if fb declines I profit? this short is also costing me interest taken by IB. I entered the calendar at $16net on July 23rd , l thought that was my maximum loss, indeed it was very much that even as FB shot up.
If you can hold the position the max loss is 16 +- financing costs.
If you can't hold the position your loss will be worse but not substantially as you are long fixed premium at this point.
I would close out the position because I don't like using balance sheet unnecessarily.
I have a similar situation. This is a little embarrassing, but I had purchased on thursday the weekly $70 calendar sbux 7/26 & 8/2 and I'm not used to trading weeklies and did nothing yesterday, and now have been excercised on the short side. I don't have the funds either so have a negative balance. I still have the long side also. I had gotten home from work friday and was looking at positions and started thinking of the ramifications and called TOS, and they seemed to imply I could get out of this, to call monday before market open. I'm thinking most likely of course will be gapping higher monday also.
You are largely hedged so it won't be as bad as you think.
Cover as close to 930 as you can and then sell the long option right after the open.
And in the future don't take delivery if you can't afford it.
Margin buy ins should be avoided at all costs. Don't let anyone else control your account.
Cover as close to 930 as you can and then sell the long option right after the open.
And in the future don't take delivery if you can't afford it.
Margin buy ins should be avoided at all costs. Don't let anyone else control your account.
Ok, thanks for your response NW. See what happens Monday am.
Quote from newwurldmn:
You are largely hedged so it won't be as bad as you think.
Cover as close to 930 as you can and then sell the long option right after the open.
And in the future don't take delivery if you can't afford it.
Margin buy ins should be avoided at all costs. Don't let anyone else control your account.
NW's advise is exactly the advise I would follow.