What I am suggesting is that he has the options in profit, and he has one month to expiry. Why take the risk. With option, I dunno how it works. It seems that as his theta winds down, the vega goes up if delta is neutral though the thing? Fuking whatever, no idea. Just get the hell out! YOU ARE IN PROFIT IN THE MOST INSANE MARKET VOL IN LIVING MEMORY!
I hope QQQ recovers like a mofo and hits over 300 before his expiry. Those contracts hit deep ITM with less than 2 weeks before expiry. Yet, he is still holding them for hedge purposes. Makes no sense he didn't at least scale a chunk out in the low 280's. He is either trolling on sim or incredibly stupid!
It amazes me how many stupid advice I just saw here. If you are ignorant please do not reply or advice an otherwise feeble trader. Google settlement for index ETF's they are different than $SPX options!
Cause it's just common trade sense to take a bit off the table if your up 1000%+ per contract? He didn't specify how much he paid but we can assume they're up a lot.
It’s not common sense if you don’t know why he’s hedging. the purpose of hedging isn’t to make money but to avoid losing money. if he’s long a lot of google and apple would it be smart for him to sell those puts and be naked now?
It makes total sense to scale out in this situation since his options expire in 2 trade weeks.. There is a high possibility he'll lose both on his long position and hedge by holding them til expiry.
He might but he might be okay with this as this is the cost of his hedge. again, how can you suggest any course of action without knowing what he’s hedging. What if he’s short a ton of tech atm options? You suggesting he scale into naked gamma into option expiry?
If he is hedging his long stocks with the puts, and the puts are 3 weeks to expiry and in profit, then yes, it makes sense to close the option in profit, because he will still be long his stock. He made some money on the hedge by closing. So he is in a better financial position compared to if he did not hedge at all. His stocks have no expiry, so the stocks have time to recover. He made money on the down-turn with the option, rather than sit on the stocks unhedged and make nothing but unrealized loss.
Also, your suppose to hedge OTM, not Deep ITM contracts. He should be closing those for a profit once they reached deep ITM and renew OTM contracts as a proper hedge. (Strategically speaking!) But why should I care, it's his money, not mine! .