Made some minor adjustments this morning. Personal: rolled ES puts sold ES Feb17 2240 puts x 2 for $17.75 bought ES Jan27 2250 puts x 2 for $7.00 remain at a ratio of 4 short ES vs. 6 short puts sold QQQ Feb17 122 puts x 5 for $1.17 Corporate: sold ES Feb17 2240 puts x 2 for $19.00 now at a ratio of 6 short ES vs. 9 short puts I still have a lot of negative deltas everywhere, particularly in the FANGs. I can't believe how strong GOOGL, AMZN and TSLA have been this morning.
By being short deltas. I realize that gets me only so far. We'd have to see a gap down of >6% (taking into account vol pop) to start hurting. Anything less will generally be profitable. I will also adjust deltas using underlying as the b/a of the options will be too large to get a decent fill. The election and Brexit were good examples of this and I kept my head above water (profitable) through both events. If vol does pick up, I'll consider long DOTM puts since the premium from the shorts will be juicy enough to finance them.
In general, I'm more worried about the markets going up with this portfolio, which is kind of silly since my core portfolio more than makes up for it and my net worth has actually increased (eg. post-election rally). But for some reason psychologically, the move up hurts.
I also don't like the term managing the risk of [blank]...I think you enter into a position and have to accept the risk of something. You can mitigate the risk by decreasing opportunity which is a continuous give and take. But once the risk is realized, there's not really much you can do about it except adjust.
A few trades this afternoon. Corporate: sold IWM Feb17 132 puts x 4 for $1.70 which are covered by the short TF sold TSLA Feb3 245/250 strangle x 2 for $9.00 legged out of short side of Jan27 2265p/Feb17 2270p x 8 for $10.00 will sell long Feb 17 2270p x 7 tomorrow, so I'm looking for a weak open back towards today's point-of-control Hopefully, the relative strength in the NQ tapers some time before this Christmas. Sheesh!
Selling premium and using the word hope generally does not end well. You are short the strongest stocks in the world and your selling downside disaster insurance as a hedge. You remind me of a guy that needs some coke to get off the lows of his alcohol. Yeah it works until you go into cardiac arrest but the combo can be functional for long periods of time. Good luck man.
You do realize that my last statement was a tongue-in-cheek comment. Yes, this portfolio is short these stocks, but GOOGL is my second largest holding in my overall portfolio. Yes, I'm selling disaster insurance, but will it be disastrous for me? No. The notional exposure to the downside is ~1x cash. I understand that I'll likely not get crushed tomorrow or even this year or the balance of the decade--but some day. And when that day comes, I'll still be in business. I appreciate the best wishes. I hope (dammit, I used that word again) this thread will be entertaining and engaging whichever way it goes.