i am long 1 ES and i have a put option, now I'm running with this put from septmeber and i made a nice profit already but i don't want to lose the premium when the put will expire i was thinking to sell a call at the money that will give me some money for sure (I'm not looking to make any profits from the ES if it continues to run) so what i am trying to figure out is where can i lose? cause -1 call is protected with the future ES and the future is protected with the option i have ( which is a risk i always take i might lose all the gains) is there anything else I'm missing ?
The sold put will limit the gains if ES continues to rise. If it falls, the put will protect it and sold call will create some extra income. What you are trying to create is called collar. Limited gains, limited losses.
>> limited gains, limited losses What you want is perhaps something else, or then maybe not. You may want unlimited gains with limited losses, a fine position to take. Or you may end up in a limited gains, unlimited losses, a loser's position. If you're the material you might find unlimited gains, unlimited losses better fits your internal structure. And if it suites you, you might find limited gains, limited losses is where you're at. Either only those, neither of them, all of them, neither of them or something else is the way to go. Bless you and may the Farce be with you (I guess ).
Roll the put (sell/buy) to a higher strike. You may want to sell an OTM call to offset some of the cost. This is one option - or just close the position - if you are satisfied with your gain and want to lock in some profit.
You effectively bought a synthetic call by the long future/long put combination. Manage a gain in the cal? Sell it and roll up if you're bullish. Create a call spread if you are neutral. Exit if you're bearish. Kind of depends on your view of the market going forward. Keep in mind if you roll you can also move forward in time. All depends on your CURRENT market view, not just the existing synthetic.
i know the idea of that, but I'm in a situtation that my ES future made a run of lets say 4 k and my put are around there top of the premium so I cant lose more then the total of protection of put?