Repair Strategy for NFLX Short Put

OptionsOptionsOptions said:
I don't see the unrealized gain of $1065. There must be a typo in the positions you opened.

  • The puts are at a loss.
  • Is it the call spread that is showing the profit?
  • But no way are the calls making up for the put positions.
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O3 nails it.

$15.67 nekkid put
-$2.50 put roll down/out
+$1.90 call spread
----------------------------
$15.07
-$16.07 Jul27 390 mark
----------------------------
-$1.00 ==> Dent of ~$100 in net_liq from pre-NFLX level.

Hmmmmm.
 
OptionsOptionsOptions said:
I don't see the unrealized gain of $1065. There must be a typo in the positions you opened.

  • The puts are at a loss.
  • Is it the call spread that is showing the profit?
  • But no way are the calls making up for the put positions.
More...

The calls are insignificant as of now. The put 390 was bought this morning at 16.06. I was also surprised to see the net gain but double-checked for typo and was wondering if the change in the option value accounted for it. I double-checked this order just now and it reads:
-1 C of NFLX Jul 27 2018 390 W Put @ 16.06
Market Value: -$1,587.50
 
Oh nvm, I found the answer in another forum. For anyone else who is also trying to learn, here’s a great explanation I found on the difference between Net Liq and P/L Open:

“Since you're trading spreads, presumably you've gotten some credit for the leg you sold when opening the trade, which is already reflected in your current cash position. Since that time, the leg you sold has become cheaper, which means you can buy it back for less than what you sold it for - thus your total P/L since on that position is a positive value (you made money).

If you were to close that position immediately, however, you'd have to pay some cash to buy back the leg you sold, which is more than you'd get from selling the leg you bough as part of that spread - so the impact on your net cash position will be negative.”

For those who already know, everybody has to start somewhere. :)
 
tom has some pretty good options,

want mine next time..

sell some far out puts 2-3 weeks out, close before earnings, no earnings risk, with only market risk in play and time decay on your side. along with room for fluctuation if you get caught In a bad case of holding through earnings.. I sold some naked and credit put spreads. also further out time gives you further out strikes.. you'll notice as earnings comes closer and closer what happens is the super wide far out strikes disappear, or become almost worthless where once they were say 1.00 or .75, and now they are .10 or .05 cents.. this is of course assuming people are buying insurance, you want the stock to stay flat, or rise some, and even if it drops some, time decay works in your favor to eat away at that price

or I love picking up scraps after earnings, my account is "maxed" so I picked up $500.. and for some odd reason these plays make me happier then the 50K plays.. every time Netflix earning is on I absolutely love coming in and scooping up those quarters as every made there dollars on it, I'm happy with minimal risk. Netflix is one of the few stocks I love coming in after earnings

another thing you can try is a super quick hit, of holding a day or weekend, you'll notice if everything stays flat.. that the price is decreased the next day.. holding even one day if you are scared can work to build tolerance and confidence, or just another tool in the arsenal if you so choose


hope you learned your lesson. seems like you don't want to play gamble bets.. which was you were betting it to move in your direction. that's a gamble bet, 50/50 chance. second, hope you learned NFLX is a super fun stock to play durning earnings. always gives me the tickles
 
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IndyJonerJr said:
tom has some pretty good options,

want mine next time..

buy some far out puts 2-3 weeks out, close before earnings, no earnings risk, with only market risk in play and time decay on your side. along with room for fluctuation if you get caught In a bad case of holding through earnings.. I sold some naked and credit put spreads

or I love picking up scraps after earnings, my account is "maxed" so I picked up $500.. and for some odd reason these plays make me happier then the 50K plays.. every tie Netflix earning is on I absolutely love coming in and scooping up those quarters as every made there dollars on it, I'm happy with minimal risk


hope you learned your lesson. seems like you don't want to play gamble bets.. which was you were betting it to move in your direction. that's a gamble bet 50/50 chance. second hope you learned NFLX is a super fun stock to play durning earnings. always gives use the tickles
More...


How is time decay on your side with buying OTM puts?
 
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