what would you do to this trade

Discussion in 'Options' started by newguy05, Aug 13, 2008.

  1. Below is the scenario, if this is your position what will be your play at that exact moment in time and why. I am interested in analysis on the option (covered put) only, not fundamental discussions.

    1) 2 days till expiration
    2) 1.2k unrealized profit on the table
    3) greeks (all values in usd):
    [​IMG]

    My take: Do nothing until expiration day and play the theta decay.
    Reason: It will take a good 15-20 pt move on the upside to match the theta decay. Or a 4-5 pt move on vol, or a combination of both. The probability of it overtaking theta decay at that moment in time is very low, therefore the position should be left alone.

    Is this the right analysis, what's your take?
     
  2. magicz

    magicz

    for me i would lock in the profit and find more opportunity for next month.
     
  3. I agree with Magic a 15-20 pt move in 2 days is very do able in the spx so profits now is a good thing..look at just today...you could leg out if you take advantage of the swings in the market. The main thing is not to be greedy.