Closed (Margin): /MES February 28th 4040 Short Put

... for a 56.00 debit.

Comments: Filled this for a 70.75 credit. Closing out here results in a (70.75 - 56.00)/.2 = $73.75 profit.

Comment:

At my posting limit, so posting the "replacement" strike here: Sold the 4050 for a 58.25 credit. Net position still leans short ... .

Trade active:

And did a few other adjustments here so that I'm net delta flat running into the weekend with the notion that I'm going to pull everything off at futures open on Sunday ... . Closed the 4010 for 45.75. (59.00 - 45.75)/.2 = $66.25 profit. Closed the 4000 for 43.25. (56.00 - 43.25)/.2 = $63.75 profit. Opened the 4100 for 75.75 and the 4060 for 60.75, as well as added a standalone short put at the 3950 strike to bring me back to delta neutral. The notion here is to let theta work for me, but I'm getting wrapped around the 4100 strike without much additional room to adjust sides, so will look to close out the entire position and start anew in the March monthly. I'm still net up, but not as up as I'd like to be at this point in the cycle.

Trade active:

And ... sold the 4280 call for a 12.25 credit to get back to neutral delta running into the close.

Comment:

Just some parting comments about reverse gamma scalping before I begin the weekend in earnest. (1) It is not particularly "elegant," as you can see by the spaghetti-works of short options I've got on at the moment; (2) It requires a bit of attention to make adjustments (rolling, additions, subtractions) at given intervals (usually when delta/theta ratio skews out too much), so it may not be for the type of trader who wants to just get on once a week and manage stuff; (3) It requires some attentiveness to record-keeping (i.e., credits received, debits paid). (4) Because of the amount of management that occurs, a higher percentage of profits go to fees/commissions.

Trade closed manually:

As planned, closed the entire position at open: $173.75 YTD gain ... .