martingale strategy in options ?

Discussion in 'Options' started by darwin666, Feb 25, 2010.


    YOU SELL DLTR options march expiration..
    the 55 moved from 30 to 70 cents.. u found it reasonable.. u sold 1.

    now the damn thing is up to 2.05. u r furious
    paper loss 140$

    u know this will go down... u can close this and sell 5 calls of 60 for 30 cents.. and recover ur loss.

    is this called MARTINGALE strategy..?

    so when it goes to 60.. then what do u do?

    close those 5 and open 65 , probably 20 of them to recoup the 60 strike loss.

    how do u decide . when to do this. .I WOULD SAY, rare..

    as it is.. the next strike OPTION is if it is UNLIKELY to be met, the premiums are V low. hence they make u sell more to recoup your earlier LOSSES..
  2. Nexen


    anything martingale is stupid
  3. It sounds like you are "revenge trading" instead of martingale trading, both of which will get you into bigger trouble. :(
  4. MTE


    Martingale works if you have unlimited capital, otherwise don't do it.