Opening (IRA): SPY April 14th 426/Sept 520 Long Put Diagonal
... for an 81.05 debit/contract.
Comments: Adding in a short delta hedge here to flatten net delta in my portfolio, buying the back month 90 delta and selling the front month 50. It has -41.53 worth of short delta/contract associated with it and a break even of 438.95. I'll look to work it like a covered put, rolling the short option aspect out for duration on extrinsic approaching worthless or look to take profit if it converges on max (which would be 94.00 here).
Granted, this isn't an ideal place to erect a short hedge, which you'd ordinarily want to do on strength. However, this weakness appears to be hanging in there, and you never know how far it will go or how long it will last. Net delta in the portfolio remains long.
Comments: Adding in a short delta hedge here to flatten net delta in my portfolio, buying the back month 90 delta and selling the front month 50. It has -41.53 worth of short delta/contract associated with it and a break even of 438.95. I'll look to work it like a covered put, rolling the short option aspect out for duration on extrinsic approaching worthless or look to take profit if it converges on max (which would be 94.00 here).
Granted, this isn't an ideal place to erect a short hedge, which you'd ordinarily want to do on strength. However, this weakness appears to be hanging in there, and you never know how far it will go or how long it will last. Net delta in the portfolio remains long.
Trade active:
Rolling from the April 14th 426 to the April 22nd 426 for a 1.16 credit as price traverses 426. Cost basis is now 79.89 with a 440.11 break even.
Trade active:
Rolling the April 22nd 426 to the April 29th 438 for a 4.87 credit. Cost basis is now 75.02 on an 82-wide with a 444.98 break even.
Trade active:
Rolled the April 29th 438 to the May 20th 447 for a 5.55 credit. Cost basis is now 69.47 on a 73-wide with a 450.53. Market making it tough to keep duration on the short leg short while keeping the break even at or near where SPY is currently trading. Delta/theta -46/9.46 per contract.
