Newbie question I have a 1300/1310 bear call spread and am also getting close to my rule that says I need to exit out. Is there a difference between "rolling" into a new farther OTM bearish call spread, --OR-- exiting the position as one trade and opening a 2nd position as another trade??? Is there a commission difference??? Any other thoughts or comments are welcome.
"rolling" IS closing one spread and opening a new one...either same month farther out or to the next month. If you do it as one order you might be able to get out cheaper than doing two separate trades. Simply because your broker may be able to negotiate the rate. Same number of contracts same commission. What I usually do is sell a bull put spread to help offset the cost of rolling. I'll also sell another call spread even farther out.
Thanks for your response Mark. Didn't realise market makers can lose money. Just thought they make the sell at the ASK and buy at the BID in offsetting/pairing amounts and laughed all the way to the bank eg. every 1300SEP Call you sold, you will buy back the same instrument and take the spread. Guess it doesn't work that way. No free lunch even for market makers
Mark, I thought market makers write a lot of naked options. Why don't you continue with your market making strategies? Percy
Coach: After the employment numbers, what's your thinking on adjusting your 1310/1320. Futures are off their highs.
I may hold off since people may not want to hold positions over the weekend given the possible escalation of fighting and oil prices moving higher. I may do nothing at all today and let it run to the close and if it is above 1290 at the close then look at adjustments Monday morning. I am taking my time with these adjustments since I have the luxury of scaling up in size as I go higher.
UPDATE CURRENT OPEN POSITION SUMMARY OF SPREADS: 1. SPX August Credit Spread LIMPING Iron Condor STO 300 AUG SPX 1125/1115 Put Spreads @ $0.50 Credit = $15,000 UPDATE Closed put spread for $0.05 and rolled up to 300 SPX 1210/1220 for $0.25. Thus an additional net credit of $0.20 or $6,000 STO 150 AUG SPX 1310/1320 Call SPreads @ $0.55 Credit = $8,250 --->Watching close ro potential adjustment NEW COMBINED CREDIT = $29,250 Return = ~10.8% 2. CLOSED July ES Adjusted Into Put Ratio Spread and Hedges GROSS NET CREDIT Profit = $14,375 3. ES/EW Call Ratio Diagonal Spread Long 50 ES Aug 1330 Calls @ 1.60 ($4,000) Update ES options worth about .90 or $2,250 right now. Once I close them, it will add to the credit profit already locked in below. Net Credit Profit = $2,750 4. ES Diagonal Put Spread Sold 20 AUG ES 1225 Puts @ 8.75 Bought 20 SEP ES 1200 Puts @ 11.00 Net Debit = 2.25 or $2,250 VIX = 14.57 [/B][/QUOTE]
I will stick with August for now. I do not believe we will have enough steam to make new highs but then again the Fed is the wild card