Option Strategy Adjustments

Discussion in 'Options' started by jwcapital, May 8, 2009.

  1. Hi Put Master,

    I have created your trade and looking at the risk graph and I have to agree with dhpar.

    Chee Yong
    #41     May 13, 2009

  2. My thanks to both of you. You've given me plenty to re-evaluate and consider.
    My focus was more technical. That being the stock being 18% OTM, being in a trading range above my strike for 6 months, stock trending up recently, a potential 7 - 12% loss of capital if I closed it between $28 - $29, ect...
    I agree my R/R is not very good, but the only way to improve it would be to select a higher strike, and/or a longer contract than 3 months.
    But then my probability of success drops.
    Are you saying I should have selected the higher strikes and simply managed the risk more conservatively?

    Put Master
    #42     May 13, 2009
  3. spindr0



    I don't buy into a fixed number such as 30% but with many strategies there's a point after which adjustments aren't feasible even if you want to hang in there.
    #43     May 13, 2009
  4. Hi spindr0 and Mark,

    Seems like my guidelines on adjustments will only work for me because of my trading style.

    Thanks a lot.

    Chee Yong
    #44     May 14, 2009
  5. gody3


    Just because you are too dumb to comprehend what he wrote doesnt mean he owes you another explanation. All you have to do is read his post slowly sevral times and you might figure out what he was saying.
    #45     May 15, 2009
  6. Decided to close the $27.50/$25 spread.
    Debit of $0.47.
    My credit was $0.40, thus a loss of $140.

    Stock still trading well above my strike, but with its large % drop today, I decided its better to lose $140, than risk $4,200 on a 3 month trade.
    Had it been a one month trade, I might have continued to monitor it, as time decay kicked in. But 3 months is too long, given its large % drop today.
    My thanks to all for your thoughts and constructive criticism.

    Put Master
    #46     May 19, 2009
  7. -----------------------------------------------------------------------------------

    Having closed my MDT trade for a small loss, I've since reinvested some of those funds into a CB credit spread on May 20th.
    I created a more S-T trade on CB for July, using 8 contracts.
    Bought the $30 puts.
    Sold the $35 puts.
    Credit of $0.75.

    Overall, I like the companies fundamentals.
    However, since this is a more S-T trade, I'm more focused on its technicals. And I think it's downside tech support is pretty reasonable it the $35 area.
    Over the past 5 years, when it's dropped below $35, its always retuned to that price, within a few days or weeks.
    Thus the reason for my selection of $35 for my upper strike.

    However, if it again tests that area, I'll have to decide whether to close it down, or give it a chance to recover,... as it has in the past.
    #47     May 28, 2009
  8. This forum is about options questions and answers not posting of ones own real or imaginary trades. Further this particular thread in this forum is a discussion on strategy adjustments not posting of ones own losing trades. I'll be happy to alert the monitors so they can keep things on topic.
    #48     May 28, 2009
  9. spindr0 and gody3 are the same ip address....how interesting...

    the plot thickens...
    #49     May 28, 2009
  10. <<< I'll be happy to alert the monitors so they can keep things on topic. >>>

    Thank you xflat2186.
    We all appreciate the moderator maintaining this and other threads, as a place for civil discussion and debate, of option related questions, discussions and sharing of ideas and strategies.
    We've all seen what can happen to an un-moderated board, like those found on yahoo.
    It was the destruction of those yahoo boards, by just a few "mystery trolls", that brought me here..... to a moderated forum.
    #50     May 29, 2009