don’t do this. It’s way too long of a term To own that Vertical, It’ll tie up 3x the capital is the fly, Your only out maybe being maybe you get in the money sooner than expected, meanwhile your payoff is less than 4:1. Not including your original basis You have the patience to watch it for the period, so do and at least recover 85% of your remaining capital to go do something smarter And don’t make the same mistake twice
I read the wrong series above, was looking at 9/2021 - assume the debit is 1.15 above and the payoff is almost 20:1 on the Jan fly same structure
No upside on a short 145 Nov 20/long Jan 21 140? There is upside along with simplicity which is a good “arb” in this situation IMO.
My first choice is to get out, as I don't see a bounce in a hurry. No point in tying up money in margin till Jan by selling/hedging, there will be many opportunities to make money before that.
Thanks! Just when I thought I was getting the hang of this....I bought that far out because I thought it was safer. I actually bought 4 contracts at $8.89 and figured I could hold them as a safe alternative and make more return than if I had bought shares. Basically I thought I could treat them like holding shares but increase my upside
I think I see what you did here. Well, you learned a quick lesson on vol. ...you don’t want to buy vol when vol is high. When you are long a contract you are always long vol, short time (theta)..., you got hosed here , I suggest read a couple books if you want to speculate on options
Vol is volume or volatility? I also bought on the second day of the recent drop, so it seemed I could buy at a low I didn't expect, and then sell as it increased. Will definitely be doing some more research...