Stock repair strategy

W

wxytrader

So I was thinking of trying out the stock repair strategy on one of my positions that is currently -pnl.

https://optioncreator.com/sttf2b7

My spreadsheet version is showing that I will break even @ $19.88, but on option creator it is showing the break even around $21. I'm assuming the premium box for shares should be your current avg price?


Here is the spreadsheet version. The position is opened with a credit so it should lower your break even without adding risk.

upload_2024-8-3_9-50-5.png


upload_2024-8-3_9-40-37.png
 
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Stock repair??

What happened ??

Got caught in an extended C wave??

Arent you the guy who doesn't believe in managing risk,delta hedging, Black Scholes or stops??

Now you are adjusting to breakeven at best on a turnaround while offering zero downside protection..

Do yourself a favor and read Macmillan..

Here's a bone..

1x2 spread breakeven

(Difference between strikes plus the credit or minus the debit ) / net short options.

Add that to upper strike if a ratio call spread.

17-19 1x2 for a .37 credit
2.37 added to 19
21.37 is upside breakeven
 
taowave said:
Stock repair??

What happened ??

Got caught in an extended C wave??

Arent you the guy who doesn't believe in managing risk,delta hedging, Black Scholes or stops??

Now you are adjusting to breakeven at best on a turnaround while offering zero downside protection..

Do yourself a favor and read Macmillan..

Here's a bone..

1x2 spread breakeven

(Difference between strikes plus the credit or minus the debit ) / net short options.

Add that to upper strike if a ratio call spread.

17-19 1x2 for a .37 credit
2.37 added to 19
21.37 is upside breakeven
More...

Yes I told you extended C's are how I get MAX position and therefore MAX profits!

Mcmillian was the first book I read on options...I forgot it has all the handy math. :)...working through Natenburg.

I don't mind hedging risk without realizing losses such as with stops or long puts etc. Short premium is essentially a dynamic stop loss.
 
traider said:
repair stock by adding more gamma risk?
Is this the new way?
More...

There is no added risk. It is opened with a credit and lowers your break even. If the stock continues down then you suffer the same losses as you would have anyway...except without collecting any premium.

taowave said:
Stock repair??

What happened ??

Got caught in an extended C wave??

Arent you the guy who doesn't believe in managing risk,delta hedging, Black Scholes or stops??

Now you are adjusting to breakeven at best on a turnaround while offering zero downside protection..

Do yourself a favor and read Macmillan..

Here's a bone..

1x2 spread breakeven

(Difference between strikes plus the credit or minus the debit ) / net short options.

Add that to upper strike if a ratio call spread.

17-19 1x2 for a .37 credit
2.37 added to 19
21.37 is upside breakeven
More...

21.37-17=4.37
21.37-19=2.37*2=4.74
?

Anyway, apparently with the stock repair strategy, You can't just pick an atm long call and then split the difference willy nilly...ie if you bought @ 20 and price was @ 15 you can't just buy 1 long @ 15 and sell 2 shorts @ 17 and expect it to work out.

I would need to get $1.66 for my short calls if I was buying the long call for $2.07 for the strategy to recover my losses of -5060. Any less and it will fall short, and the shares would get called away at a loss.

$19 is the max gain for the ratio spread and therefore the position. After that, the stock and long call profits will be cancelled out by the short calls.

upload_2024-8-4_5-56-43.png
 
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Sure there is,you are giving up all upside above the BE I laid out..

Lol@ your example..What are those numbers??

You csn pick any spread with you want,any ratio you want..

you are looking for the free lunch, aint happening.

wxytrader said:
There is no added risk. It is opened with a credit and lowers your break even. If the stock continues down then you suffer the same losses as you would have anyway...except without collecting any premium.



21.37-17=4.37
21.37-19=2.37*2=4.74
?

Anyway, apparently with the stock repair strategy, You can't just pick an atm long call and then split the difference willy nilly...ie if you bought @ 20 and price was @ 15 you can't just buy 1 long @ 15 and sell 2 shorts @ 17 and expect it to work out.

I would need to get $1.66 for my short calls if I was buying the long call for $2.07 for the strategy to recover my losses of -5060. Any less and it will fall short, and the shares would get called away at a loss.

$19 is the max gain for the ratio spread and therefore the position. After that, the stock and long call profits will be cancelled out by the short calls.

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Why are you fcking around with income strategies (sic) when EW gives you a 100% hit rate? It's an arb. How did your interpretation of EW in MARA fail so utterly?
 
Lol!!! My boy is back!!!
MARA ???? How about CLSK??

he didn't fail,he just a bit early on the extended C wave coming to a close..

poopy said:
Why are you fcking around with income strategies (sic) when EW gives you a 100% hit rate? It's an arb. How did your interpretation of EW in MARA fail so utterly?
More...
 
poopy said:
Why are you fcking around with income strategies (sic) when EW gives you a 100% hit rate? It's an arb. How did your interpretation of EW in MARA fail so utterly?
More...

It's not a fail until you realize a loss...currently it's just a premium earner. It's no different than investing in a dividends stock...but you get paid for the volatility.

For the record this wasn't an EW trade...just traded the expected short term move. Aka an educated guess. :)
 
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