Here's my position. What do I do now?

Discussion in 'Options' started by brothertruffle, May 31, 2006.

  1. Advice needed. How can I tweak this SPY put/call spread position to improve my odds of making money?

    I'm kind of new to options so don't use words like gamma unless you tell me its good.

    (see attached JPG):confused:
  2. MTE


    You are new to options and yet you have a position across 7 strikes and two expiries!? The best way to manage it would be based on net greeks.
  3. segv


    It is likely that no one will tell you exactly what to do, because to do so would be giving you investment advice. I cannot give you investment advice either, so you are going to have to make up your own mind as to what to do, or hire an investment adviser. I can tell you that understanding the characteristics and risks of options (a.k.a. the "greeks") is essential to option trading, and that option traders also use other metrics to help them make decisions, such as:

    o Probability of profit or breakeven at expiry
    o Probability of loss at expiry
    o Maximum loss
    o Maximum profit
    o Market sentiment
    o Personal forecast

    You jumped in the deep end, so you are going to have to learn to swim very quickly, get out of the water, or drown.

  4. Neodude


  5. dac8555


    agreed. doctrs dont jump into surgery without understanding how the organs work, and lawyers dont go to the courtroom without understanding the law.

    Study first...Execute second

    if you have money to burn...stick with the trade till expiration...see what happens.
  6. rosy


    looks like unlimited downside risk. if thats what you want cool
  7. either close or butterfly it off...

    either iron or conventional fly...

    how the hell did you end up with this...raging bull...

    famous last words..."hey watch this"...."BOOM"
  8. I have been trading stock options on and off for the past three years. I also don't understand why you have these positions across seven strikes in the same month. You've got to know the risks, the potential profit and loss, etc. before establishing any position. And you need to get a software package to help you figure all this out. Optionstar is what I am using now. It goes without saying that you don't want to depend slavishly on this kind of software.

    I hate fiddling with numbers myself, but you can't afford not to deal with numbers if you want to stay long in this business.
  9. Brothertruffle,
    Ask yourself "what is my prognosis for the underlying" and if you can answer that then your problem is almost solved.
    daddy's boy
  10. cnms2


    You need to forecast both the underlying price and your options implied volatility over their life. All three elements are equaly important: price, IV, time.
    #10     May 31, 2006