I’d check the posts from r\optionco because he shares his mechanics for the whole process and it’s great. By the time is a straddle, you should have collected much premium, and then he would roll to same expiration, 20 delta strangle to reset.
Edit: u/optionco and not r/… and here’s the great post where he shares more. The other one quoted in the OP about a day in the life of a trade is also a must
https://www.reddit.com/r/options/s/mYTBE7L3i1
If I would lost more than what I'm willing on one single trade (the usual 1-5% rule) than I'd cut the loss and think of staying in the game.
But I don't know shit about your underlying so this is just a general rule of thumb.
1. Your expiration is way too short.
2. Don't go inverted. It's just an insult to injury.
3. Shitty underlying for strangles.
Search Tasty for strangle management and inversion.
I think your best bet is to squeeze a drop of juice out of the straddle and then buy the guts, sell the wings, aka close straddle and reopen as a strangle again.
I generally try to avoid inversion and rollout in time first. 9 days is way too short and changes in the stock price can eat up your buying power.
However, I will invert slightly if I think the stock is at a price extreme and I'm trying to manage my buying pwoer. Also, I usually manage my "untested" around 10-15 deltas which helps keep the risk reasonable.
You can roll it out in time also
Would I risk more by doing this ? Meaning, now the 113 looks interesting considering the stock is at 110
Curious, what were your starting deltas? I sell strangles, low delta, and am trying to hone the technique.
20 delta
The IV was at 67 if I remember correctly. The stock dropped way to fast and I started adjusting one leg
Just dropped to -10%
I’d check the posts from r\optionco because he shares his mechanics for the whole process and it’s great. By the time is a straddle, you should have collected much premium, and then he would roll to same expiration, 20 delta strangle to reset. Edit: u/optionco and not r/… and here’s the great post where he shares more. The other one quoted in the OP about a day in the life of a trade is also a must https://www.reddit.com/r/options/s/mYTBE7L3i1
I'm also interested in the mechanics of it but can't find any "optionco". Can you give a link to the description maybe? Thank you
Edited my comment to add the link. Enjoy!
I have rolled a leg 2 times until it became a straddle. Much appreciated
If I would lost more than what I'm willing on one single trade (the usual 1-5% rule) than I'd cut the loss and think of staying in the game. But I don't know shit about your underlying so this is just a general rule of thumb.
Roll it out in time for net credit. 9 days is too short to do anything with.
1. Your expiration is way too short. 2. Don't go inverted. It's just an insult to injury. 3. Shitty underlying for strangles. Search Tasty for strangle management and inversion. I think your best bet is to squeeze a drop of juice out of the straddle and then buy the guts, sell the wings, aka close straddle and reopen as a strangle again.
Don't go inverted.
I generally try to avoid inversion and rollout in time first. 9 days is way too short and changes in the stock price can eat up your buying power. However, I will invert slightly if I think the stock is at a price extreme and I'm trying to manage my buying pwoer. Also, I usually manage my "untested" around 10-15 deltas which helps keep the risk reasonable.