Did not have time to post or look at trades until the end of the day but I think it is time to at least think about an adjustment to the Jan 19 IC at 260/256 put side and the 272/276 call side.
There are many options but here is what I am looking at.
1. Buy back 3 of the short calls. That basically takes us flat, $21 profit but still max loss of $730 if you let it ride to expiration and we are above 272. Decreases the max loss from 4k but still ouch. The advantage is if it keeps going above 278 you start making money again. I am not betting on it for only 16 days left but possible.
2. close it out at current prices. Made 0.16 on the put side, lost 0.30 on the call side so basically a break even. Then flat for next week. No gain but no loss to capital and can recycle.
3. Buy some long calls, I like the 268 call with a delta of 0.68. Of course we go directional at this point but break even is then 270 and at 272 we make $610 on 5 contracts and there is no further upside risk, in fact if you keep going make some decent cash. 280 or higher and you are up 2770+ but that is a big if. You would buy 5 of the SPY Jan 19 268 calls for around $3.29. Max loss down to 1390 from 268 down to 260. Still ouch but better than a 4k loss. You could go a little cheaper going to the 270 for 1.80 and only changes the graph a few hundred.
4. Roll it out a few weeks and hope for a pull back. We could roll the 272 out to 274 at 28 DTE for about even money then buy the 277 for 0.16 after selling the 276 for about 0.09. So it will create a slight debit but we would also roll the put side up to 263/260 for 0.17 credit. Closing the other would cost about 0.07.
5. You can also diagonal, calendar, debit spread/credit spread it off, but I am looking at the cheapest ways to adjust or to get out at even or a tiny loss and not extend duration more than a few weeks.
Thoughts, comments, @jeffcp66 have any ideas, you have been doing this a lot longer than I have.
Wont do anything until I see how we open tomorrow.
Options Bistro 