Update on one of my many TT style managed strangle positions. Basically, starts out as a wide strangle and is managed with credit rolls as the stock moves and held forever or until a perfect exit presents itself. I look at it like a dividend position that pays weekly. This has been a great test of this strategy in a worse case scenario of a massive sell off just after the position was started.

Long story short, right after selling the original strangle gold began imploding so I continued selling weekly calls all the way down after rolling the puts out about 3 months and leaving them at the same strike (nice credit). The entire time position size was about half until I could get more comfortable with the style.

Now, with GLD rebounding my short calls are finally ITM so here’s the adjustment. I’m getting a little bullish at least up to the 50ma resistance.

Rolled part of this week’s 109 calls to Feb monthly 119 puts @ 3.20 credit adding to original puts to get a full position.

Then, paired off with that, rolled remaining 109 calls to Feb monthly 113 calls at 1 for 5 ratio for 6.60 net credit.

So now, in a Feb monthly 119/113 inverted strangle full (but still small) position. If GLD starts rolling over again I’ll continue rolling down short calls slightly for a credit and roll the puts out again a few months. The cool thing about this is so far the trade has only been using about 3500 in margin (slightly more now with a full position) and has brought in a grand total of 37 points in premium in just a few months. That’s a decent dividend! The key to these types of positions for me is to forget about the P/L on the original position and accept the fact that it’s a long, long term play and try to collect as much premium as you can all the time. If it’s a ticker that’s not going to zero and uses little margin then sell, baby, sell!

Just an update for anyone interested…I think someone had told me to keep them updated so there it is.