What is the best approach for this trade ?

Discussion in 'Index Futures' started by traderwald, Aug 23, 2019.


  1. The position is down -70 points on the ES. If I close ES and keep put open it would be an L of 70 pts / $4.5k and mkt dir is unknown as of now.But per understanding max L is 21 pts with the put in place and the ES contract open.

    Maybe better to buy / sell another Opt on this rather than close the ES since it has max L covered for now. So main tgt is reduce the put premium further below 21 pts.

    If mkt going to tank then maybe buying another put is an opt rather than close ES for this ? What do you think ?
     
    #11     Aug 24, 2019
  2. SPX Blaster

    SPX Blaster Guest

    Another thing you could do is close all positions on Sunday open. Take your losses and take the rest of the week off.
     
    #12     Aug 24, 2019
  3. ?
     
    #13     Aug 24, 2019
  4. traderjo

    traderjo

    SO this is "Married PUT" as simple as that.meaning Max loss on expiry = the cost of the put which is 26.55 pints x $50 minus the 5 points x $50 you say you have earned by closing a sold call option on ES some time ago? correct ?
    - sell another OTM call with 30 Aug expiry to recover some of the 21 points lost?
    - Do nothing and have 21 pints loss
     
    #14     Aug 24, 2019
  5. traderjo

    traderjo

    by the way what was the original Call position was it part of this Married PUT in other words did you do a Collar?( Long Fut+ Long PUT + Short Call)
     
    #15     Aug 25, 2019
  6. yes correct
     
    #16     Aug 25, 2019
  7. traderjo

    traderjo

    so could you disclose what was the original call position and it's close?
    Main question then if this was a Collar then what was the reasoning behind it in the first place ? what was your expectation?
    Did it had any upside?
    Your Downside protection was alomst at 100% as you ahve used nearest strike PUT ( 2936-2935)

    So far we know
    Long ES @ 2936
    Long ES PUT Strike 2935 = - 26.55
    Short ES Call Strike= X ? Price = Y
    Closed Long CALL =Z ? ( Y-Z = 5 point)
     
    #17     Aug 25, 2019
  8. SPX Blaster

    SPX Blaster Guest

    Looks like SP rallying. Your long contract will be losing less. But your put option will reduce in value.
     
    #18     Aug 26, 2019
  9. tommcginnis

    tommcginnis

    While you guys are all debating how many bearish put spreads can dance on the head of a pin, Mr etrades here lost an opportunity to buy a 2930 call for ~$3.00 all day long. Could've bought the 2930/35 spread for ~60¢ midday. Either one would've completely wiped out any chance for a loss from his very δ-neutral short ES[2936.3] and long ES[2935] put.

    Now, as of now, the Aug30 ES 2930 call sits at >$5, and the 2930/35 spread is >$1.


    "Peace out, y'all."


    Ooops. Let's travel back in time......
    https://www.elitetrader.com/et/threads/what-is-the-best-approach-for-this-trade.335382/#post-4915196 :cool:
    versus,...
     
    Last edited: Aug 26, 2019
    #19     Aug 26, 2019
  10. SPX Blaster

    SPX Blaster Guest

    Pretty easy to make that "suggestion" after the fact.
     
    #20     Aug 26, 2019
    traderwald likes this.