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in FB calendar but now up ~15% any adjustment suggestions?
- Thread starter nixodian
- Start date
Unless you think fb will fall back, no. You are now long the put so how would you adjust a put that's gone massively against you?
Take the short call into expiry and hold the short stock against your long call (synthetic long put, as previously suggested by Newwurldmn) until the long call expires.
Next time, look at calendars that don't short an option with only a couple days left. Doing so raises your profit potential, but also narrows the range the stock can be in for you to not lose everything. Sell a one or two week option instead.
Next time, look at calendars that don't short an option with only a couple days left. Doing so raises your profit potential, but also narrows the range the stock can be in for you to not lose everything. Sell a one or two week option instead.
since FB has weekly options you can certainly roll the short call into next week to see if it does settle down. However based on todays opening prices it looks to me as if you still make money if you close the trade.
Quote from GregLoehr:
Take the short call into expiry and hold the short stock against your long call (synthetic long put, as previously suggested by Newwurldmn) until the long call expires.
Next time, look at calendars that don't short an option with only a couple days left. Doing so raises your profit potential, but also narrows the range the stock can be in for you to not lose everything. Sell a one or two week option instead.
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
Quote from RichardRimes:
since FB has weekly options you can certainly roll the short call into next week to see if it does settle down. However based on todays opening prices it looks to me as if you still make money if you close the trade.
thanks for reply RichardRimes
just checked optionchain, l would still make a tiny profit if l closed it now, with FB @ 32.9, l may roll it up a little, ie buy back the short and sell a higher strike and take a little loss just now, though thinking about synthetic long put as suggested, opinions?
If your rolling it up you are taking on additional risk. It doesn't usually work for me, so I tend to keep the same strike if I roll it out. You have two more rolls available as well. What will eat up your profit is the commish.
I did not see that there were 26.5 calls in August ..is that what you have?
I did not see that there were 26.5 calls in August ..is that what you have?
Quote from RichardRimes:
If your rolling it up you are taking on additional risk. It doesn't usually work for me, so I tend to keep the same strike if I roll it out. You have two more rolls available as well. What will eat up your profit is the commish.
I did not see that there were 26.5 calls in August ..is that what you have?
im with IB which can be reasonable in commish, tho other times not so
who are you with?
i am long 26.5call aug 9th as well, it was a calendar, I bought a FB 26.5c calendar on 23July Tues, going long the aug9th and shorting the July26th, at 0.18 total net. actually if closed it now, i would make an overall loss esp taking into account commissions, bot 25$, surely rolling up would mean extra premium coming in, to mitigate the big loss taken from buying back the short 26.5c july 26th?
Quote from nixodian:
I bought a FB 26.5c calendar on 23July Tues, going long the aug9th and shorting the July26th, at 0.18 total net.
well as soon as market opens today the july 26th going to be well ITM, be great if you can give any recommendations or adjustments that might work?
thanks in advance
The calendar is quoted at 0.03 mid as I write this. Unless FB does a huge retrace (down to around 30) you just need to take the loss on that position. No amount of adjustments will repair it, just look for opportunities elsewhere.
oh..... Aug 9th..I thought you meant the reg Aug exp...in that case agree its best to close now. You do have better rates with IB..I'm with TOS but have cut back trading regular options since their commissions are so high..Trading Futures Options and looking for a second broker.
I try to avoid trading calendars around earnings or at least give yourself a couple of months to roll around in, calendars are fine in lower vol environments.
I try to avoid trading calendars around earnings or at least give yourself a couple of months to roll around in, calendars are fine in lower vol environments.