Not to hijack a thread, but I'm going to declare a short of the ES (DEC) at 3022, putting me $60 underwater. So, with the market ~3082, I'm going to NOV22 and sell a 3030 -0.21δ put for $8.75. My BE is now ~3030 (3030.75). If the market goes to 3022; the FUT will be $0; the put will be -$8.00; the position will be +$0.75, without commissions. Stay tuned!
(If you're thinking this sounds familiar, ...
https://www.elitetrader.com/et/threads/what-should-i-do-with-this-trade.337600/ )
So, two weeks ago, the market closed at 3022, and has risen 60pts in 10 trading days -- 6pts a day. Comparatively, accepting the premium of an $8.75 put expiring in ten market days requires the market to gain less than 0.875pts per day through that time, just to break even. (Well, there's also the potential for the market to sink some, affording an opportunity to improve one's position, should that come up...
) Thus, while this sub-thread might appear to be about a covered-put tale, it's much more about revenue-generation versus market movement.
My own expectation is that a sizeable dent can be made in the current $60 loss -- to the point where the entire position can be vacated with the retirement of the DEC19 future contract. If I can cut the loss in half, though? I'd call that pretty good. Regardless, it should be entertaining......
(If you're thinking this sounds familiar, ...
https://www.elitetrader.com/et/threads/what-should-i-do-with-this-trade.337600/ )
So, two weeks ago, the market closed at 3022, and has risen 60pts in 10 trading days -- 6pts a day. Comparatively, accepting the premium of an $8.75 put expiring in ten market days requires the market to gain less than 0.875pts per day through that time, just to break even. (Well, there's also the potential for the market to sink some, affording an opportunity to improve one's position, should that come up...
) Thus, while this sub-thread might appear to be about a covered-put tale, it's much more about revenue-generation versus market movement.My own expectation is that a sizeable dent can be made in the current $60 loss -- to the point where the entire position can be vacated with the retirement of the DEC19 future contract. If I can cut the loss in half, though? I'd call that pretty good. Regardless, it should be entertaining......
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