3309 Drysdale Ct
Edwardsville, IL 62025
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 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
The more standard approach is to roll out a month and up.
Thanks DigiNomad !!!! Appreciate that !!!!
Have a great weekend !!!!
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