Hey ET. trying to see if this makes sense. I am short a stock at $235. It is now at about $215 but looks ready to bounce. I think the down trend will continue but the market will probably run back up. If I cover the short I can make about $1,300 right now. Would it make sense to buy a put at the money now for about $400 executing in a few weeks? I would still be up $900 and still be in the trade. I am just trying to make this a little less stressful.
Depends: Your thesis to short. Your thesis around why it will pop up. on your belief of the timing of this pop up, the timing for your short thesis to be realized and the magnitude of both moves. Those questions coupled with understanding what the put is pricing will tell you what you should do
All of it , no matter what strategy, Depends on you guessing right on the underlying. That's it. That's all there is to it.
Any adjustment will transform your trade into a different position altogether. If you buy puts, it would be like being flat and buying a call. Would you buy a call on it if you were flat today?