Jeff 4:24 am on Thursday, January 7, 2016

Good morning…

Well, not like we didn’t expect it. Don’t panic like the guy in the cartoon… protect your capital, take opportunities when you can. I’m looking for a big spike in the VIX to consider any neutral or bullish trades; even with Wednesday’s sell-off, VIX was relatively quiet. It has not yet signaled panic, but it has given plenty of downside warning. Once the panic comes, volatility will be driven to higher levels and VXX products will be primed for selling. SPX spreads will be possible in 1600’s or lower.

Drsatx 6:16 am on Thursday, January 7, 2016

Jeff (and all others), I have a question re: the 1/8/16 expiration. While I have some call spreads that will likely expire out of the money; pondering what to do with a couple of put spreads that will be in the money (later today). My question: is it better to close/roll these put spreads versus closing the short put part of the spread and letting the long put ride? To clarify; looking for opinions, as I realize the action I take is my responsibility.

BTW, kudos to Jeff for the Options Bistro endeavor.
- Jeff 6:24 am on Thursday, January 7, 2016
  
  I almost always close spreads as I opened them… all at once. If you can play intra-day swings adeptly, you can try for closing legs separately. If you think the market will crash lower tomorrow, overnight might work. But what if it rallies on a good job number? I also have a couple threatened put spreads and I will watch today and make a decision toward end of day. I usually don’t roll spreads immediately that are so close to expiry… I close them then work to make up the loss over time with extra spreads that are more controllable.