Posted by rmoore100 on 9th of Jun 2023 at 02:12 pm
Diginomad, was wondering if you've made any adjustments yet on
your SPX call credit spreads ? I was trying to recall
what your criteria was for adjs. Was it when the
current loss was twice the amount taken in, or just simply one time
(i.e. initial premium received $1.50, now to buy back with a $3.00
loss or to buy back earlier when the buyback itself is $3.00 ?)
Also, I believe you said, for the adjustment, you just
double up on the contracts, keep the same expiration, and move the
strikes up ? Thank You
Posted by DigiNomad on 9th of Jun 2023 at 02:38 pm
My rule is to defend when short strike touched or 200% losses. I
defended about 50% of short 4400 SPX calls the other day by rolling
them up to 4500 and essentially doubling down on the number of
contracts. Take a look at (admittedly, I pulled the trigger early
as neither of the conditions were met).
Note that this is absolutely not the way it's taught or
the safest approach. It only works if You started out around 2 to
3% of your portfolio in short premium and it's your first roll. Its
less stressful from a margin perspective in portfolio margin
accounts... But there's a relatively high bar to open one of
those.
The more standard approach is to roll out a month and up.
Diginomad, was wondering if you've
Posted by rmoore100 on 9th of Jun 2023 at 02:12 pm
Diginomad, was wondering if you've made any adjustments yet on your SPX call credit spreads ? I was trying to recall what your criteria was for adjs. Was it when the current loss was twice the amount taken in, or just simply one time (i.e. initial premium received $1.50, now to buy back with a $3.00 loss or to buy back earlier when the buyback itself is $3.00 ?) Also, I believe you said, for the adjustment, you just double up on the contracts, keep the same expiration, and move the strikes up ? Thank You
My rule is to defend
Posted by DigiNomad on 9th of Jun 2023 at 02:38 pm
My rule is to defend when short strike touched or 200% losses. I defended about 50% of short 4400 SPX calls the other day by rolling them up to 4500 and essentially doubling down on the number of contracts. Take a look at (admittedly, I pulled the trigger early as neither of the conditions were met).
Note that this is absolutely not the way it's taught or the safest approach. It only works if You started out around 2 to 3% of your portfolio in short premium and it's your first roll. Its less stressful from a margin perspective in portfolio margin accounts... But there's a relatively high bar to open one of those.
The more standard approach is to roll out a month and up.
Thanks DigiNomad !!!! Appreciate
Posted by rmoore100 on 9th of Jun 2023 at 03:55 pm
Thanks DigiNomad !!!! Appreciate that !!!! Have a great weekend !!!!