MamaCash 6:42 am on Wednesday, January 16, 2019
Tags: SPXstrategy ( 12 ), SPYcraft ( 95 )

SPX 7dte IC defense

Per my SPX IC defense plan, I bought back half of my Jan18 2635 short calls. This will allow one of the long calls to run unhedged in case this rally continues into Friday.

Addy 10:25 am on Wednesday, January 16, 2019

buy 1 or 2 calls delta 60-70 to neutralize your delta from negative to positive
- MamaCash 10:29 am on Wednesday, January 16, 2019
  
  Yes, that’s another way to neutralize delta or reverse direction. I think that’s the Dave Aquino way, the guy from BaseCamp who markets the 11-hour Options strategy. Buying back half of the calls worked beautifully. Out with an extra $500 in profit.:-)
  - Addy 10:42 am on Wednesday, January 16, 2019
    
    buying 1/2 of the short of BeCS? on how many days before expiration? and on how many contracts?
    In fact Jeff, Mort, Paul and I used to know a very nice guy (Robert) who had brain cancer, I think he is dead now because we have not heard from him for a while, he used to tell me about the delta.
    Currently David use the delta.
    - MamaCash 10:44 am on Wednesday, January 16, 2019
      
      In this case, half was one contract. Yes, if I had five contracts, it would make sense to buy one 60d option. Expiration is Jan18 as mentioned in the post.:-)
  - hcgdavis 11:03 am on Wednesday, January 16, 2019
    
    Yeah, that’s how we are going to manage #spycraft but occsionally my buy some longs between the strikes Might be a little cheaper way to get delta neutral.
    
    Lots of tactics, choice is up to you. Can buy a few higher delta, buy back half the shorts, buy 6 or more ATM options on a 10 lot, or go long between the strikes. Goal is to have a back ratio and get the directional kick at that point.
    
    Won’t always work, my EOG trade reversed after it broke the short strike but I was able to hedge it off with the fly and lock in some profit.
    
    Good trade Mammacash @kathycon!
    - Addy 11:23 am on Wednesday, January 16, 2019
      
      By the way is David sell the 1 or 2 calls expiring the same day of BeCS, the ones used to neutralizes the BeCS, or let them expire with the BeCS
      - MamaCash 11:26 am on Wednesday, January 16, 2019
        
        I’m familiar with his system. I borrowed from it liberally and then made it my own. If I overcome my potential loss plus make a big profit, I’m not going to wait for expiration. I’m going to take the profit. The market can reverse just as quickly as it went up or down.
        
        Addy 11:43 am on Wednesday, January 16, 2019
        
        yes you are correct.
        
        Addy 12:03 pm on Wednesday, January 16, 2019
        
        Sorry I missed saying these neutralizing the calls/spreads are 2 weeks ahead of the expiration day of the spread. And yes you can close them early or use them for other ahead spreads. He also use delta neutral overweight to gain more cash, these are double, if you have 10 contracts then you buy 4-6.
- MamaCash 10:30 am on Wednesday, January 16, 2019
  
  Buying back half of the calls is much cheaper than a 60d SPX option in my case. I only had two lots so bot back one call.

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