Selling Calls To Take Advantage of SPY Drop to 82 By 18-Sep

[traderyin]

Quote from shortie:

i locked in some gains by adding -4x puts as per earlier post. i will try to nurse the position into the expration.

Is it worth the extra risk of the market moving down sharply again for those premium (time decay)?

 

[shortie]

Quote from traderyin:

Is it worth the extra risk of the market moving down sharply again for those premium (time decay)?

there is quite a bit juice left in those premiums. i think it's worthwhile to wait 3 more days. there is always risk...

 

[shortie]

just watching the paint dry. i probably won't trade until a larger move takes place. still contemplating whether i should partially hedge the risk of a large drop in the market. if i do that, my current top choice is to short ITM July calls. July 90 Calls trade for 4.20 right now - plenty of juice.

the midday update is to illustrate portfolio fluctuations and effect of option decay.

 

[atticus]

Quote from shortie:

just watching the paint dry. i probably won't trade until a larger move takes place. still contemplating whether i should partially hedge the risk of a large drop in the market. if i do that, my current top choice is to short ITM July calls. July 90 Calls trade for 4.20 right now - plenty of juice.

the midday update is to illustrate portfolio fluctuations and effect of option decay.

You keep the $2k from 90.40 to 95.20. Neutral at 93.00 at a max gain of 3,800, including gains to date.

 

[shortie]

Quote from atticus:

You keep the $2k from 90.40 to 95.20. Neutral at 93.00 at a max gain of 3,800, including gains to date.

thanks, atticus. it is good to have reference points as far as max PL, b/e, etc.

today maybe i leaned a bit to the greedy side. added -2x June 91 puts during midday drop. then watched the market climb thinking i will short a couple of ITM July calls for protection "once the market climbs a bit higher...". well, it never did.

now with my strangles complete i will be selling July calls on any upside (if it comes) - this is easy. now if we have a DROP tomorrow, i will have to improvise based on what i see.

 

[traderyin]

Quote from shortie:

thanks, atticus. it is good to have reference points as far as max PL, b/e, etc.

today maybe i leaned a bit to the greedy side. added -2x June 91 puts during midday drop. then watched the market climb thinking i will short a couple of ITM July calls for protection "once the market climbs a bit higher...". well, it never did.

now with my strangles complete i will be selling July calls on any upside (if it comes) - this is easy. now if we have a DROP tomorrow, i will have to improvise based on what i see.

Those premiums don't come without risk

 

[shortie]

Quote from traderyin:

Those premiums don't come without risk

heheh, indeed.

 

[shortie]

waited out the drop this morning. at some point unrealized PL dropped to +1400 or lower. now that the market is moving higher i started to short July ITM calls for protection against a drop.

Midday update:

 

[hug]

why dont you buy back the 94 call ? you won more than 90% of the initial sold premium ...
by buying them back, you offset a nice risk

 

[shortie]

Quote from hug:

why didnt you buy back the 94 call ? you won more than 90% of the initial sold premium ...
by buying them back, you offset a nice risk

i did not think about it this morning. in fact, they traded 0.11 so it may have been a good idea to close them.

on the other hand, this morning spy was <91, so from that point to reach 94 it would have to gain 3.5% - that's a lot to gain in two days.

now i think it is good that i did not close them because i do have short puts that offset those calls. with strangles in place i want to have as many options as possible to expire worthless.