SweetBobby, if ES price moves up tomorrow, so that you cannot short the next cycle puts (at 50 strike points higher), for $3 or better, what will happen? Would you for example sell at 100 strike points above the long puts costing $1,018.20? Isn't it safer to put the entire diagonal at once? or the difference is usually negligible? Thanks for sharing
Great question. At this point, I will not sell any additional puts until my replacement long’s get filled at $1.35. I have about five working orders to fill a number of longs. I really benefit from an upward or sideways market, while being fully protected if a crash occurs.
Question for you: Have you ever tried, analyzed or backtested zero cost portfolio insurance, i.e., let the short and long premium net to zero? I ran some analysis over the weekend using various strikes, ratios, expirations on historical SPY...
"zero cost collarrrr" Umm, let me guess... you have to short 30D calls and buy 20D puts. It's a synthetic bull vertical. No shit, rly. So WTF bother with shares?
OK, so a short backspread. Fundamentally (for you) no difference as you're not edging the swap. There is (almost) NO edge in structuring (unless you're me).
He partially paid for his long puts with shorter duration puts. What if either he sells more puts to balance out the cost of the longs or goes lower long put strike so that the costs net out to zero? Like a free lunch.