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Sometimes if I feel the need to exit, but want to stay in the same market I will roll into strangles, either in the same month or rolling out to a further contract to get more time premium and distance. If the price movement was a spike and things calm down it works fine and the problem is fixed. On the other hand, if it continues to move against you or reverses hard enough you may have to readjust again and it ends up you just prolonged your pain. I don't normally look to do this if I feel the trend that was moving against me is strong and will likely continue.
Not necessarily. Sometimes, if I see trouble ahead, but I'm not at the exit point, I'll just roll into a lower strike put. This will probably mean selling more options, to end up the same end profit overall, but it provides me with some breathing room.
Stranggles? Congratulations. I hope one day I can practice well that strategy. I shall read that book. Can you tell me what´s your anual profit average (% of guaranties commitment)?. Thanks .
From the chart attached you can see the big jump to the record high on the last day of the year, I attribute this to last minute window dressing by funds adjusting to make sure they own the years best performers.
Since then though prices have drifted sideways but the Cumulative delta has been steadily declining by some 40000 contracts. This is typical at tops and shows distribution. Heavy selling on the way down then prices float back up due to light buying/no selling, then get pushed back down on more heavy selling.