someone asked me how could they trim a position if they only
bought 1 option, that's true you can't split an option
that's why for options if you wish to have that 'trim'
opportunity in the future do more than 1 option as your baseline
multiple for the 1st entry. Remember I show 1 as a baseline
structure, with the 2nd entry as double the 1st and the 3rd as
triple the first.
1st, 2nd, 3rd entries: 1, 2, 3. or 2, 4, 6, or 3, 6, 9, or
5, 10, 15 and so on following that 1,2,3 multiple - those are
examples of following that multiple
it's whatever fits your risk profile and account size guys
Posted by jtsurfah on 20th of Jul 2021 at 12:46 pm
Trim single option position - a couple of ways to trim a
profitable single option position while still allowing for some
upside is to either "cover" the position (sell a call against it)
or "collar" it (sell a call and buy a put). I typically just sell a
call...often near or in the money.
Posted by jtsurfah on 21st of Jul 2021 at 12:28 am
Nice trade...for now anyway
Starting with a long call into an
oversold situation and covering it to take in some premium once the
easy money is made is one of my favorite ways to get into a bullish
spread tread. Depending on the circumstances, if you get the
initial move you expect, you can often sell a call against the
naked call that will completely eliminate possibility of any losses
on the overall trade (other than a portion of unrealized gains),
but still alow for some upside in the form of premium. Or you
can take some more risk and sell an out of the money call for a lot
more potential pop (if you're right).
Posted by mkrajah1211 on 21st of Jul 2021 at 11:26 am
Thanks, or you could simply just delta hedge half of your
position i.e sell 50 SPY shares/CFD's to effectively "lock in" half
of your option call contract. Once you fully close out the option
you can then just close out the half SPY portion with it
Question answered
Posted by matt on 20th of Jul 2021 at 12:41 pm
someone asked me how could they trim a position if they only bought 1 option, that's true you can't split an option
that's why for options if you wish to have that 'trim' opportunity in the future do more than 1 option as your baseline multiple for the 1st entry. Remember I show 1 as a baseline structure, with the 2nd entry as double the 1st and the 3rd as triple the first.
1st, 2nd, 3rd entries: 1, 2, 3. or 2, 4, 6, or 3, 6, 9, or 5, 10, 15 and so on following that 1,2,3 multiple - those are examples of following that multiple
it's whatever fits your risk profile and account size guys
Trim single option position -
Posted by jtsurfah on 20th of Jul 2021 at 12:46 pm
Trim single option position - a couple of ways to trim a profitable single option position while still allowing for some upside is to either "cover" the position (sell a call against it) or "collar" it (sell a call and buy a put). I typically just sell a call...often near or in the money.
jtsurfah, thanks for the idea.
Posted by craigm on 20th of Jul 2021 at 05:01 pm
jtsurfah, thanks for the idea. I sold a call near the close before the EOD drop.
Nice trade...for now anyway
Posted by jtsurfah on 21st of Jul 2021 at 12:28 am
Nice trade...for now anyway Starting with a long call into an oversold situation and covering it to take in some premium once the easy money is made is one of my favorite ways to get into a bullish spread tread. Depending on the circumstances, if you get the initial move you expect, you can often sell a call against the naked call that will completely eliminate possibility of any losses on the overall trade (other than a portion of unrealized gains), but still alow for some upside in the form of premium. Or you can take some more risk and sell an out of the money call for a lot more potential pop (if you're right).
yep that's a good point,
Posted by matt on 20th of Jul 2021 at 12:55 pm
yep that's a good point, you can do creative things using spreads etc, which I'm not an expert of, but yes
Thanks, or you could simply
Posted by mkrajah1211 on 21st of Jul 2021 at 11:26 am
Thanks, or you could simply just delta hedge half of your position i.e sell 50 SPY shares/CFD's to effectively "lock in" half of your option call contract. Once you fully close out the option you can then just close out the half SPY portion with it
I'm going to keep it
Posted by retirefire on 21st of Jul 2021 at 11:38 am
I'm going to keep it simple and just buy 2 options.