Question about Long Strangle

If I place a trade for a long strangle, when I close out of the position, do I always have to do it for both legs at the same time? Or is it possible to sell to close the call then a couple days later sell to close the put, for example? Thanks for the advice.

 

Of course, you can only return it as a set. Also, they are going to charge you a re-stocking fee.

 

Got it. Thanks.

 

You can leg out of it if situation warrants. If stock makes a large move higher, you can close the call for a profit and leave the put in place if it has very little value and save the commission. Leave it in case stock does any reversal. rare situation but again easier to simply enter and exit strangle as one trade though.

 

BTW, Santa was joking.

After you buy or sell any spread of any kind, they go into your account as individual option legs. For the purpose of margin, there are no offsets for a long straddle, so there is no margin penalty for taking them off individually. If you have long and short options where the margin on the short is reduced by the long, you will need enough equity to cover the short side if you leg out by closing the long first.

 

I am joking (sorry, was hoping it was an obvious supermarket reference). As Bob said, with any options structure you can unwind any of the legs at will.

 

Probably the best way to trade them if you can get good at legging out at the right time.

 

ah I see. Thank you guys for the clarification. And sorry I didn’t get the joke even though it’s basic market knowledge. I didn’t know, which was why I asked the question in the first place. Thanks for everyone’s help.

 

Only if you have a receipt. Otherwise you only get store credit.