Selling Calls To Take Advantage of SPY Drop to 82 By 18-Sep
- Thread starter shortie
- Start date
sold 2x June 93 Puts with spy around 94.00 (lucky fill). later when spy bounced to around 94.75 (just below previous day close) sold 2x 93 Calls.
basically, i am building strangles as the market bounces. ideally, i would like to maintain excess of short calls because those short puts may start costing me if the market sells off hard.
basically, i am building strangles as the market bounces. ideally, i would like to maintain excess of short calls because those short puts may start costing me if the market sells off hard.
Quote from shortie:
sold 2x June 93 Puts with spy around 94.00 (lucky fill). later when spy bounced to around 94.75 (just below previous day close) sold 2x 93 Calls.
basically, i am building strangles as the market bounces. ideally, i would like to maintain excess of short calls because those short puts may start costing me if the market sells off hard.
This will work very well...
..Until the day it doesn't. And you may look back and say you wasted a ton of time.
shortie, what % of the account is represented by the position you posted and are you monitoring the market 9:30 to 4?
if you look at the sp500 chart, we are winded very tight was a high probability of a breakout and opx next week, your short strangle/straddle are pretty dangerous right now.
How are you applying stop loss?
if you look at the sp500 chart, we are winded very tight was a high probability of a breakout and opx next week, your short strangle/straddle are pretty dangerous right now.
How are you applying stop loss?
atticus,
i don't trade futures. i guess i could just hedge with SPY. in this case the main advantage of futures is that they just need less cash because of leverage, correct?
so, are you saying that i should finish building strangles so that i have -12x calls and -12x puts and then short 1200 shrs SPY? this will remove the downside risk. i just want to make sure i understood what you are suggesting.
Midday Update: added -4x 92 puts in increments as the market was going down.
Quote from shortie:
atticus,
i don't trade futures. i guess i could just hedge with SPY. in this case the main advantage of futures is that they just need less cash because of leverage, correct?
so, are you saying that i should finish building strangles so that i have -12x calls and -12x puts and then short 1200 shrs SPY? this will remove the downside risk. i just want to make sure i understood what you are suggesting.
Midday Update: added -4x 92 puts in increments as the market was going down.
Sort of, but I would not suggest selling a full 1200 SPY, as that would convert the position to 12 otm short calls and 12 itm synthetic short calls. I was thinking more along the lines of 12x12 on the strangle and 300-400 short SPY.
Nice going.