A rough month so far
I’ll update on my July expiration postitions soon.
It is a rough month so far. I had to defend 3 different trades. This will likely occur 1-2 times a year. The key is to stick to the plan I explained in the previous post.
Posted by
at
15:36:01
Hello Big R Got your blog from W.R. or Bill R. I trade similar to you so here is something I do when the market goes to far in one direction. In the current down trend the put side is always getting to close in an Iron Condor. I buy back the winning side at .10 or less and I also buy back the losing side but then I sell a whole new Iron condor position on to cover the loss and comissions on the losing side. The new Iron Condor is usually real close to the debit to buy back the losing side. Obviously if it is to close to expiration I move on to the next month for even a better credit and a wider Iron condor. Just one of the possible moves to keep the original income for the month.
Glad to have your blog I will also tell a few people about this forum.
JimH,
Thanks for your comment! Yes this is a valid approach. I have done this several times in the past but I typically move each side independently. I go ahead and act on the troubled side and roll it further out. I then roll the other side closer to the money if there is at least 3 weeks to expiration and if the move is confirmed.
There are so many options for defending a position when trading this way. It is amazing.
If you don’t mind sharing, what is your trigger for when to make this move? Do you use a %probability point or some other indicator?
Thanks for your comments,
Big R
Big R,
Since volatilty changes option premiums I sell on down days and buy on up days. I usually just go by the probability percentage on the Think or Swim Platform but it also depends on the amount of credit received for the new position. I usally will not enter a position if it does not calculate out to a 20% or better return for the experiation cycle it is placed for.
Jim