Today's Action STC 2 AMGN OCT 67.5 c @ 3.50 Year to Date P/L Account Value: $14,845.50 YTD Gross P/L: 5,480.00 YTD Commiss: 634.50 YTD Net P/L: 4,845.50 YTD % P/L: 48.5% Got out of the AMGN calls at B/E. Unfortunately they didn't do their job, so I decided to close out the position.
Don't jinx me now. If we get a rally it will hurt my SPX diagonal where I'm making some good cash on the pullback and pop in the vix.
You're right, I didn't have a lot at risk as it as a small position. It was/is an educational experiment for the most part. I put the first position on a few weeks ago expecting a pull back but the market kept creeping up so I "adjusted" to cap my loss and enter a new position to profit from a pull back I thought was coming at some point (little did I know how close it was). I thought a pullback from the new higher level wouldn't be enough to get me to b/e or profit on the original position. I know you put these positions on and just let them be. I'm just trying out an ATM spread for the first time. Live and learn.
I did this because I wasn't sure how much more creeping the market was going to do so I was trying to get ahead of it by going CTM instead of ATM.
I'm not going to comment on your trade, because it is up to your personal style and risk tollerance. I just wanted to comment on ATM/CTM credit spreads. One thing to remember is that it is very beneficial to keep in mind a slightly longer term forecast of direction and vols. This will help you immensely in your adjustments. What I mean is that if I were to have opened the same spread that you did, I would have been thinking to myself that the bear move would come sometime between now and the end of OCT. This would have allowed me to sit tight on the current spread a little longer and if I did have to roll it wouldn't have cost me anything in terms of additional debit or risk.
Had it been a CTM spread, after all this time, i am certain it would've been in the green albeit slightly. Certainly, a better place to adjust from if an adjustment was deemed necessary. Perhaps, it was the "ITM" status that got you worried and the lesser risk just wasnt comfortable enough. Is it better to give yourself some cushion and trade off some risk? Only you can answer that, just something to think about next time.