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2024
August 25th, 2020 at 10:36 am
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!