fuzzballl 10:37 am on Friday, July 6, 2018
Tags: LongCalls ( 495 )

CELG again….

#LongCalls – This is getting old. Big rally today above the 50ma. Rolled iron condor to a (semi) Jade Lizard putting most of the risk below the 50ma now.

Won’t bore you with numbers but rolled the short put side up to the 50ma. Took the credit and rolled short call side up. Call side is now a dollar wide with .40 credit. Put side is wider now so that’s where the risk is.

Plan A:

If it continues rallying I’ll roll the short puts up again to try to get as much of the 60 cent risk as I can.

Plan B:

If it tanks I may close the whole thing and see where I stand. If I’m not satisfied I’ll roll it all into a new 2020 LEAP position since it seems like it’s finally reversing course.

smasty 12:20 pm on Sunday, July 8, 2018

The option pit guys have taught me to buy an extra, cheap, call inside the risk graph towards break-even. It has made a huge difference on my condors and butterflies to keep them safe on a breach. Flattens the T+1 line a lot.
- hcgdavis 6:21 pm on Sunday, July 8, 2018
  
  Buy early or when it breaches or when it is about to breach?
  
  I understand the mechanics, just seem to always screw up the timing.
- smasty 7:11 pm on Sunday, July 8, 2018
  
  You can wait for price movement before buying the call, but then it is more expensive. So I buy the call at the time I put on the condor/fly, especially since almost 100% of the time it’s the call side that gets breached (for me). Look at the pic of an actual trade I have on for this week in XLY. In addition to the extra call, you can see I also bought 14 shares of stock…that was to make it delta neutral at inception. The yellow line vs the pink line is what the call does (yellow hand drawn).
  Obviously the sea of death is still there, the way I manage this is to give it just a little time in the “sea of death” before it’s closed (or continue to delta hedge w/ shares, or buy another call). But the losses are minimal. The idea is just to slow the rate of loss as it approaches the right-side boundary. BTW, you can add a put and call on to really flatten the pink T+1 line in both directions.