Two weeks ago, I sold an April 150/160 SPX credit spread for .15. I sold the short for .47 and bought the long for .32. At the time it was way otm. Today, The S&P reached 1435, 15 points away from the money, so I bought back the spread because 15 points so far away from expiration was risky for me. I bought it back for .55. The 150 was bought for 1.05 and the 160 I sold for .6. Did I do the right thing? Should I roll to a higher strike tomorrow? TY, Atlantaboy
Yes you did the right thing by cutting your loss. If you still feel the same about the direction the market will move then yes you should roll to a higher strike.
Whether you did the right thing or not depends not on what people at ET think, but what your risk/position management plan said and whether you actually followed it or not.
My plan was to roll to a higher strike, but it seems that it is difficult to roll to a comfortably higher level. If I rolled to 147/148 call spread, that's only 20 points further away from my original spread with 29 days left. That's a lot of time.
First of all, let's get the underlying and strikes right. You keep talking about SPX, but the strikes are not SPX strikes. So which one is it? Also you intially had 150/160 now you wanna roll up to 147/148, how's that rolling up? Care to clarify?
Now that we got that straightened out, what was the question!? If you don't feel like rolling up gives you a good risk/reward then just don't do it and move on to the next trade.