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  1. phil

    Good morning!

    SDS/Youngy – Well the short Jan $30 calls are now 0.54, so those were easy to close.  The Jan $15 calls are now $2.01 as SDS keeps sinking but it doesn't make sense you couldn't get $2.35 for those as it was that price still on the 17th and even on the 20th again:

    And $3.70 was easy to fill on the 2022 $15 calls too:

    The 2022 $15s are now $3.50, so cheaper but now the roll is net $1.50 and not net $1.35.  Ideally, when you are doing a roll, you want to (in this case) offer to sell 20-50 Jan $15s at $2.40 while offering to buy 20-50 2022 $15s for $3.60 and, if you get lucky, the both fill and you've rolled 20-50 for $1.20 and then you get to work on the next batch.  You WILL fill one side or the other and, having gotten a good price, you then set about rebalancing before moving on to the next set.  

    And yes, 2/3 covered to make more money as I'm more sure we're going to crash now.  Also, if we do get a spike up, it makes it easier to cash in 100 of the 2022 $15s for, let's say $5 (if SDS is over $20) and then we have knocked 0.75 off the net of the remaining 200 spreads so they are nearly free insurance for 18 months.  See – planning ahead!





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Phil's Favorites

Why do bankers behave so badly? They make too much money to ask questions

 

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Over the past 16 months journalists have been scouring through more than 2,000 Suspicious Activity Reports originally sent by banks to the United States Treasury, before being leaked to Buzzfeed and then passed along to the International Consortium of Investigative Journalists.

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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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