The Fe why is that a sigh? He's asking a good question. If you dont like reading stuff like this maybe this isnt the spot for you.
What about keeping the Feb 1910s. Buy back the Jan 1945s and sell the Feb 1945s. Change the diagonal into a vertical.
Yeah, you can do that. It may just be a bit "forced" position as an outcome of your situation, thus preventing you from thinking of other ideas. Basically I'm not sure how much sense does it make to hold an ITM vertical spread that cannot gain much more value while having risk of turning against you again in case we have market pullback. So I'd just consider closing that position and thinking of another trade.
You have left money on the table. That’s the cost of being short gamma. Further you will have some delta risk that you will have to manage. I don’t have an options pricer in front of me nor market data but my guess is that your trade is busted and you are better off closing everything and re-establishing a new position if you remain bullish.
So it looks like about a scratch now. You paid 46 for the spread and that's about where its trading now. There is still about 10 in premium in your Feb calls. Probably worth just taking the whole thing off and starting fresh.
Happened to me often enough back in 2013-14 that since then I no longer leg into a spreads, flies, condos etc. If you think there is still some up side, consider your short an independent trade, take the loss and hold the long till maturity. Rolling the short increases your risk of further losses as gamma and delta will work against your new position. If it were me, I get out and start over. As of now you are looking at even, which is not too bad consider you started at a net -$46. To survive long term, we newbie retails need to learn how to take a loss.
You are going to be long the Feb 1910 synthetic put for apx 11 bucks. But which exp Feb call did you sell? If its Feb 21 or later,you are good to go.. Sell the 1910 put at 11.7 and you walk away a winner
RE: Short the Jan 31 1945 Calls @ $9 Any update on how you handled this tough situation? You would be under great pressure to close the short position as soon as possible, but AMZN's trading action was the opposite you would have liked. The calls traded from about $100 down to $60 throughout the day. Ideally you would want to buy back at the low - but you don't have the benefit of hindsight and don't know when the low-of-the-day will be. Very tough call you had to make today. IMO ..... You would have to close when the market opened - you can't take the chance of AMZN going up.
Thanks everyone for your input. I've been traveling this past week so I'm only getting around to updating this thread. And the fact that I had to catch a plane late morning last Friday while trying to check markets, AMZN stock price, input orders, etc. made it less than ideal trying to manage this position. So I hear most of you who advised me to just close out the positions and reset for a possible new trade. It was either closing it out or rolling out the short Jan 31 C1945. I decided to roll, and it obviously wasn't easy given the 10%+ gap up in the stock that morning and trying to make my flight. Anyways, I managed to roll it for flat to Feb 21 C1970's, so now I have a Feb 21 C1910-C1970 vertical that cost me about $46 with max profit at $14. Of course, the whole market tanked that afternoon while I was on my flight but what can you do... I realize what my downside risk is if the whole market or AMZN tanks before expiry, but part of my thinking is that if the stock drops below my short strike at $1970 and stays above my long strike at $1910 on Feb 21, I have the choice to take assignment and then start a campaign of writing covered calls against my long stock to make some income until my stock is exercised away at some point. This assumes the whole market and AMZN doesn't complete crater such that writing covered calls would be akin to picking up dimes in front of a steamroller, but underlying all of this is that AMZN reported such a fundamentally strong quarter that I'm bullish on the stock. In hindsight, what I should've done or also have done, as some of you pointed out, was to have written some puts last Friday or earlier this week regardless of whether I closed out my initial trade or not. Also, in highsight, I obviously shouldn't have sold the Jan 31 C1945, or I should've picked a higher strike, which would've made the roll easier. But I sell these short dated options frequently during earnings season to take advantage of the elevated vols.