#ShortStrangles – TT recommends rolling the un-threatened side for additional credit and even going inverted if needed. It works great but can sometimes catch you in a whipsaw. Been trying to come up with something that would defend these positions without the inversion. Whaddya think of this? Whipsaw still a concern but not as likely compared to TT strategy.
1. As one side begins getting threatened (maybe a strike or two before going itm) roll unthreatened side up to delta 30ish
2. If stock continues in same direction then roll to straddle.
3. Could even skip step two and go straight to step four
4. At or slightly prior to threatened side going itm:
a. Book big gains on non threatened rolls
b. Roll threatened side into a NEW strangle in same expiration for as close to a credit as you’re comfortable with.
5. New strangle wouldn’t be worth much since you’re splitting original premium in that position between two new positions or could just split all premium including rolls but not book it until position is closed.
6. Manage new strangle same way.
$SPX STO 3/31 2375/2350 BECS @ 4.50
$SPX STO 4/7 2280/2305 BUPS @ 5.70
$SPX BTC 4/7 2455/2430 BECS @ .15 Sold for 1.65 on 3/10
And for another inspired educational moment for me:
Held to expiration
$SPX 3/27 2320/2345 BUPS for a 200% loss. Obviously it was worse earlier in week and day, but if only I HAD PLACED MARKET ORDER INSTEAD OF LIMIT there would have been a small gain. Sorry for yelling. There, I feel better.
SVXY BTC Mar31 $120 puts for 0.50, sold for 2.24 last Thursday.
Bought to close $SVXY Apr 7 86.50 puts @ .15. Sold for 2.05 on 2/24.
CONN is a specialty retailer of appliances and such I have never heard of in NW Illinois. It’s an $8 stock. 4 of it’s last 10 earnings have resulted in -24, -26, -30, -40, the last 2 however have been +11 and +8. On Jan. 4 of this year it was almost to 14.
After all of that, I bought an April 21 (only monthlys available) 8 put for .65, strictly a roll of the dice, I had Kentucky going all the way.
Taking these off the table instead of waiting until April for the last .05 or .10. Bought to close:
$DUST Apr 21 53 calls @ .10. Sold for 1.20 on 2/27.
$DUST Apr 21 55 calls @ .05. Sold for 2.03 on 3/3.
$DUST Apr 28 60 calls @ .10. Sold for 1.00 on 3/14.
Delta adjustment rolling put up to the 50ma support…
Rolled Apr monthly 240 put up to 255 @ 2.95 credit.
Position is now 255/275 strangle @ 11.51