I have CVX July 100 CC. Is buying July 105 Call a good way to hedge the upside in case CVX ramps above 100?
Depends what is your objective. Considering the time left for July, what will you do if CVX is above 100 but below 105? You will be called out and 105 call may be worthless. The delta of 105 C is less (13) vs. delta of 100 C (38). So your 105 C July will not appreciate as much as 100 C. You can think of buying Aug 105 C instead of July. The Aug 105 C has a delta of 25 which will be a good hedge as you will have enough time for it to appreciate in case CVX goes up. You Another options is buy back 100 C, and sell 105 Aug C for a small cost. There might be other variations depending on your goal, do you want to let go CVX if called out, or just trying to reduce the cost. Hope you are not under the impression that a CC strategy is a hedge for the stock.