Short Strangle on MER, need feedback on this trading

Quote from forex-forex:

They would be about $15.00 OTM, could close them though and free up margin for the next trade. A nickel would probably be the last week. This is something that newguy05 would plan beforehand.
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i am sorry you guys lost me here. What you mean? "keep the shorts open? Open at a nickel? " and the response to that? didnt get it.
 
Quote from newguy05:

i am sorry you guys lost me here. What you mean? "keep the shorts open? Open at a nickel? " and the response to that? didnt get it.
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The options would be worth a nickel and you have a choice to buy them back to close the position. This frees up margin for the next trade and protects you from a nasty after-hour gap against you. But since this would be into the last week you could let them expire worthless. This is something to think about.
 
Quote from forex-forex:

They would be about $15.00 OTM, could close them though and free up margin for the next trade. A nickel would be the last week. This is something that newguy05 would plan beforehand.
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The Jan 70s are 15 cents. I can't imagine leaving it open.
 
atticus, what are you saying exactly i dont understand. The Jan 70 calls are 0.45, 75 calls are 0.15. Below is my trade:

- Short MERAM (Jan 65 Call)
- Short MERMJ (Jan 50 Put)

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FF, yes it's something that has to be decided when the time comes. As a general rule, i usually cover when the shorts are at 20% to lock in profit and free margin for next trade, unless it's really the last week of expiration and not much news/volatility, then i let it expire and save some commission as well.
 
Quote from FCostella:

Does that mean you rec buying it?
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No, it means that if someone was short it then there's no point keeping it open as the risk doesn't justify the reward of 15 cents.
 
Quote from FCostella:

Does that mean you rec buying it?
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Quote from MTE:
No, it means that if someone was short it then there's no point keeping it open as the risk doesn't justify the reward of 15 cents.
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Yes, atticus recommends buying back the short option.
 
Quote from atticus:

But the 70s are 14 points otm. A reference strike to price the 65s or 50s if either strike were hit.
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I referenced the Dec $15.00 OTM options for a quick price guide for 1 week left and they are about $0.05. Obviously my "Some exit plans" list isn't complete but is a starting point.

I had a December DIA Iron Condor and used the second exit plan: "If it's an Iron Condor you would have to consider liquidating the entire leg that is ATM and leave the OTM leg open". My latest update: DIA Iron Condor
 
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