My naked SPY calls went deep in the money. but still made BBQ and had a good day

[IamTheCasino]

I'm too stupid to understand this thread.

Consider yourself fortunate..

lmao.

 

[Overnight]

Consider yourself fortunate..

Roffle.

 

[destriero]

Thanks to hedging. Had short SPY 415 puts I wrote and collected 7.72 a contract.
It looked like I would be getting some stock delivered so I wrote naked calls to flatten my deltas a bit. Markets plunged as expected and I locked in the 415 long calls for 22-30 cents as a hedge. Both contracts expiring this friday.

Of course mega upswing above my expectations happen today and my long calls go deep in the money. no big deal Just did my usual BBQ etc, enjoyed the day and late evening went and hit that exercise option emergency parachute button and got my SPY shares immediately delivered to the account. first time I have ever had to exercise a long option.

Anyhow always hedge your positions because an unexpected wave could creep up and slam the ship. Too many people get complacent and end up blowing out the account.

Polenta?

 

[KINGOFSHORTS]

The markets do not move as expected.

They usually do for my trades, but today was a "Rogue Wave" As the famous James Cordier said. But unlike him I actually

Your post is confusing at best.You were short the 415 puts at 7.72,market sells off and you hedge with some naked calls to offset your Delta " a bit"???

You are short .8 Delta puts and the market plunges as expected??

Then the market reverses,and,somehow you buy back all your short calls,and supposedly go long them and sell stock against the auto exercise...

All this while grilling burgers???

That's one helluva method of Delta Hedging..

I did not buy back my short calls they became covered calls once I exercised my long call and had stock delivered. I am long stock and short the 416 calls for jul 18.

I was expecting to be assigned stock on that 415 put friday as the market started the decline I went and sold short calls. When the market to a hard turn it looked like everything as expected but the opportunity to buy the 415 calls just in case at 30 cents or less availed themselves I went ahead and hedge just in case.

so yeah I did not have to spend friday dealing with that crazy run up. Yeah if I could go back in time I would have loaded up on the calls.


Important lesson always hedge, or end up like that James Cordier.

 

[daytonabeach83]

Thanks to hedging. Had short SPY 415 puts I wrote and collected 7.72 a contract.
It looked like I would be getting some stock delivered so I wrote naked calls to flatten my deltas a bit. Markets plunged as expected and I locked in the 415 long calls for 22-30 cents as a hedge. Both contracts expiring this friday.

Of course mega upswing above my expectations happen today and my long calls go deep in the money. no big deal Just did my usual BBQ etc, enjoyed the day and late evening went and hit that exercise option emergency parachute button and got my SPY shares immediately delivered to the account. first time I have ever had to exercise a long option.

Anyhow always hedge your positions because an unexpected wave could creep up and slam the ship. Too many people get complacent and end up blowing out the account.

perhaps i'm misunderstanding something here, but in this case, why exercise the contracts?

wouldn't you be better off a) closing the puts for a profit, b) selling the long calls for a profit, and c) using the combined sum to pay the cost of closing out the naked shorts? the math should put you in the same exact spot, but without assignment fees and that whole process...