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Currently I hold the following positions in the short option portfolio:
SF P8.60 / C11.00
I intend to buy back the strangle at 50 %.
LHG P60
Longterm. The February contract looks undervalued, although it might see the 60 again before turning upwards. Cash is weak. Intend to sell LHG calls at significantly higher price of the underlying.
LCZ P100
LCG P98
LCG P96
Longterm. Placed orders to sell LCZ / LCG calls above the market.
CLH C61-C71
Longterm. No Intention to add short puts in the near future.
Two small lots of ES ATM put and call spreads. I hold them in my stocks account, where a Delta-neutral strangle has the same (even a bit smaller) margin as an outright position.
CT calls: I bought back the last (of four) series of CT calls with a loss, when CT price gained due to the hurricanes. Typical example of changing fundamentals.
Coffee in Brazil approaches the blooming period, and the weather forecasts for the next 10 days are dry. If it stays dry after this period prices and volatility will rise significantly. I intend to sell calls high above the market some time in September or October. (Currently I hold an outright long position.)
See my ideas for the meat markets in the recent post below.
I traded the Financials (including currencies and gold) quite a bit, but my analysis showed that these trades were among the less profitable ones in my portfolio. Thus, I decided to reduce trading of Financials.
When you sell options, how do you calculate which price you are willing to take?
I am currently placing a sell order for LCZ7 C 130 Bid/Ask is 250/275, thus I have placed my sell order at 275.
I am not sure how I would determine if I would be ok with 250 or not.
There are several ways to deal with this situation.
If I absolutely want to have this position I do not mind to get 10 % less. This might be the case if you are looking for the second leg of a strangle, and want to avoid to be left alone with one leg.
I also like to define a range to enter a trade. I sell a third at the current price to be in the trade. And the other two lots at a higher price. This helps psychologically not to chase the trade.
Sometimes there is a good support / resistance on the chart of the underlying in the area where I want to sell. In this case I sell depending on the price of the underlying.