I don't recall discussing "repairing" a position. I don't think of buying a naked put that drops below my strike as an exercise in repair. Sometimes a bad market takes down good companies at good prices. Selling covered calls and collecting dividends, is simply part of getting "paid to wait" for recovery. Personally, I've never been a big fan of "rolling" a deteriorating position as a general practice, when that trade still has time left in the contract. WHY? In order to roll a position, you generally 1st close the position. If the position is closed, the trade is over. It's done. It's gone. As long as the trade is now over, done and gone,.... that remaining "unit of cash" is now free for another trade, in another stock. Therefore, before getting right back into the same deteriorating stock you just got out of,... 1st look for another stock that may be safer and more stable, and may pay a similar or better credit, per the same unit of time. The reason most investors prefer to roll (get back into the same deteriorating stock they just closed),... is because they feel if they make money on the "same stock", then that earlier loss was not really a loss. Even though it was. An arguement could be made that I did a form of rolling on my NTES trade. It started out as a deteriorating $41 strike and now it's a break even $37 strike. I don't consider it a roll, as I never closed the position, freeing up the unit of cash for another trade elsewhere. But I also would not argue the point if someone disagreed.
The inference here is repair. I don't see any other translation. It IS the only choice (closure) when you start with a bull position and no hedge. Either you're a permabull or you're generating passive strategies with no real interest in hedging. "Strong companies" are not inputs in an option pricing model. When the spread goes tits up there is no longer an opportunity to hedge and the prudent move is to cover. The fact is that you're always long delta from inception and you're seemingly always in the mkt.
Nothing wrong with doing either of these as long as your intellectually honest with yourself. Agree with you on the repair.
I suppose, but passive strategies eventually get nuked. I take exception with the "adjustment" euphemism that occurs after the bullets have left the gun. Where alpha is replaced with "strong companies".
I'm not sure what your definition of a "stong" company is, as I don't recall ever using that term. My terms are "financially healthy and a reasonably valued price".... both via a blend of specific metrics. And I realize they are not inputs for an option pricing model either. But my point is, when your only choice is to close a deteriorating position, regardless of how "major or minor" the deterioration is.... I find that choice unacceptable. But I understand why closure is sometimes the only prudent choice, even if it's just a minor deterioration. For example, the spread traders exposure to excessive margin leverage if he instead bought the stock(s) long. In addition, if spread investors are NOT selecting reasonably valued prices, and NOT restricting most of their trades to financially healthy companies, and NOT selecting strikes with stong tech support, (all because they feel somewhat protected via the hedge),... then I understand and agree with not wanting to buy even a minor deteriorating stock. I also would not want to buy even a minor deteriorating, over valued, over debted, non tech supported company either, as an alternative to closing the trade. Particularly if my account then ends up over leveraged as well. YIKES! But since 90% of my companies are not over valued, and not over debted, and have strong tech support, and I'm not over leveraged,... I prefer having the CHOICE of buying the company as an alternative to closure.
Your statement is incomplete... but I'm sure it was ment to be. BTW, in a sense, I feel I also trade volatility to some degree. I just do it in a different manner than you. I do it via the timing of when I initiate a trade, and when I close a trade early. That being, I attempt to take advantage when I can, to potential minor changes in IV working in my favor, when I initiate and close a trade. Most of my stocks are dropping when I initiate trades on them, and they are rising when I close them early. That's "my" version of trading volatility.