Spy example with a 30 point spread. Based on math, the straddle is selling for 7.6 next Wed or 1 week and 4 x that would be 30 points. So here is an example on a 30 point wide iron fly.
Second graph shows an adjustment if it dropped to 262, now of course the prices would change but shows a flattening of the risk curve.
I know this is not what you are doing but just trying to get the basic math down.
So if the first graph is correct, at what point do you adjust?
Stop at 9.3 debit, then add next spread in same expiration or going out to next expiration? Obviously at this point one side would be winning.
This is kind of my idea with the #lizardpies, sell the straddle to make as much decay as possible, hedge the upside, cash secured on put side.
Yeah, post the live trades, I am interested in how it works live in the market 🙂