mortlightman 8:52 am on Saturday, May 12, 2018
Tags: Fuzzy ( 414 ), FuzzyRepairs

#Fuzzy Would like to get…

#Fuzzy
Would like to get a few ideas for #FuzzyRepairs How do you handle them when under water. Still have a couple from Mid Feb reversal that I am adjusting but most are at a bigger loss than I would like.

jsd501 9:28 am on Saturday, May 12, 2018

Which trade are you asking about?
jsd501 9:57 am on Saturday, May 12, 2018

I am not sure which trade you have on but IMHO, the trade should have the loss defined when you put the trade on. Then it is a matter of selling the near by calls and get as much premium until the trade is paid for or you unwind the trade. As long as you have the disaster puts in place, keep selling calls until expiration. I think it is preferable to buy the long dated option out as long as possible, right now 2020 seems to be as far as one can go.
- mortlightman 11:45 am on Saturday, May 12, 2018
  
  That was my mistake to close.
  Thanks
fuzzballl 1:10 pm on Saturday, May 12, 2018

Without some more details I can’t really say. I definitely agree with @jsd501…theses types of trades I do with this style are the longer term duration over direction. I handle the short term fluctuations by just having the mindset that when I put the LEAP position on I just assume it’s going to zero. But….if I pay 20 bucks for the LEAP and can collect 50,60, 70 dollars or more of premium over it’s life then it’s all good.
- mortlightman 1:59 pm on Saturday, May 12, 2018
  
  This is one that I put on WMT in February and it went max right away. I made a few sales and adjustments but just kept losing more. Thinking of rolling it out and down to jan 2019 and sell against it. This was stupidly handled by me.
  jsd was correct should have just closed it and taken loss.
  Thx
  - fuzzballl 2:09 pm on Saturday, May 12, 2018
    
    I’m not sure he was saying to close it and take the loss. I think (correct me if I’m wrong jsd) he was saying that your risk is defined when you set the trade by the calculated max loss on a fuzzy or the cost of the long LEAPS on just buying them outright.
  - hcgdavis 5:05 pm on Saturday, May 12, 2018
    
    You can also roll the entire spread down or reverse it to a put #fuzzy. I tend to set up more calendar type leaps, the others here go more ITM on the long side. I have found with calendars, fairly easy to roll the entire spread up or down and add spreads as it moves. You may still lose a little but by moving my calendars I can usually cut the loss by 50-70% or so. Then if you still hold the LEAP can look at it longer term and keep selling against it.
jsd501 2:32 pm on Saturday, May 12, 2018

Fuzzball, you are correct. I did not say to take the loss. I think that sell and get the most premium is the best way to go. The faster you cover your maximum loss, the sooner you start making pure profit.
- fuzzballl 2:34 pm on Saturday, May 12, 2018
  
  Exactly…I just posted a more in depth look up above in my mindset for these. Early in the life of the trade the look of the losses takes some getting used to if it moves against you early. Absolutely have to take a long term view and see the potential reward at the end.
  - mortlightman 2:40 pm on Saturday, May 12, 2018
    
    So basically I should buy calls out in 2019 or 2020 and sell weekly against it. Total all losses and use that as a basis to figure how much I need weekly to get all losses and costs out of it.
    - fuzzballl 2:44 pm on Saturday, May 12, 2018
      
      That’s it. That’s how I handled my ROKU position. Had sold some puts that went immediately underwater. Wasn’t comfortable with those so closed them for a loss. Then…bought Jan 2020 LEAPS and added the loss of the put sale to the cost of the LEAPS. That was my new max loss number. Then divided that by the weeks to go from my first weekly sale to Jan 2019 and Jan 2020 to get my two numbers in the example above of all my 2020 positions.
    - jsd501 2:45 pm on Saturday, May 12, 2018
      
      Yes, but I would go out as far as possible on the call side. As of now, that means 2020 and not 2019.
      - fuzzballl 2:46 pm on Saturday, May 12, 2018
        
        Definitely…don’t mess with 2019 now. Also, we’ll start seeing 2021’s trickle in as early as Sept or Oct.
        
        jsd501 2:47 pm on Saturday, May 12, 2018
        
        I want the 2021 in the TQQQ.
        
        fuzzballl 2:48 pm on Saturday, May 12, 2018
        
        🙂 🙂 🙂
      - hcgdavis 5:06 pm on Saturday, May 12, 2018
        
        You can usually get an entire extra year of time for like $3. Worth it to go longer.
- jsd501 2:44 pm on Saturday, May 12, 2018
  
  For example, on my ERX trade that I put on. Long 36 calls in 2020, at 10.43, I sold the May 11, 37.5 calls for .52 cents. I then rolled into the same strike but picked up .49 cents for May 18 expiration. So, I have covered 9.6% of my possible loss in the first 2 weeks.
  - mortlightman 2:48 pm on Saturday, May 12, 2018
    
    OK guys. Thanks will let you know how this works out. Great education.