Buy or Sell This Condor?

Discussion in 'Options' started by Altavest_Erik, Sep 11, 2018.

Would you buy or sell this iron condor?

  1. buy

    1 vote(s)
    33.3%
  2. sell

    2 vote(s)
    66.7%
  1. What would you do?
     
  2. tommcginnis

    tommcginnis

    I'll play --
    so, if only given the buy/sell choice, yeah, I'd sell.

    But as I write this:
    $1.30 IC = 60¢ puts + 70¢ calls.
    puts short-δ = -0.09, vertical-δ = -0.015
    calls short-δ = +0.06 vertical-δ = +0.028
    ----------------------------------------------------
    position-δ = +0.013

    But if I went to Sept.28, at the very same strikes, I could get
    $0.80 IC = 45¢ puts + 35¢ calls
    puts short-δ = -0.06, vertical-δ = -0.019
    calls short-δ = +0.04 vertical-δ = +0.019
    -----------------------------------------------------
    position-δ = 0.000

    So, I can get 60% of the revenue, for a fraction of the position risk, AND get an |increase| of position-Θ from -0.11 to -0.14, "Oh Yay, Team!!" :D

    Same thing plays out, FWIW, if you go to equivalent δs....

    So, Rinse&Repeat, and whether you're holding to expiration or not, you're nearly doubling the original theta.