Saturday, May 30, 2009

[TheOptionClub.com] Delta Adjustment



Carmelo,

Adjusting is an art not a science.

I like to adjust when my delta is half of the theta I'm getting because of risk reward.

Another point move against me is that many more doys I need to be rite about my delta, gamma and theta.

You go from strategy to tragity/speculation if you let it go further. No absolute answers but it's one thing I do.

Secondly I use futures or stock to hedge depending on the trade
1) the bid ask spread is narrow products more liquid
2) cost less than options; (look into the cost associated with /es and /tf)
3) Don't add vega risk to my position

No absolute answers but try these alternatives.

Only like short premium positions where my theta is greater than my short gamma.

Email me and I'll tell you why.

Good luck

--- In OptionClub@yahoogroups.com, "Nava Elgar" <nava@...> wrote:
>
> I adjust Iron Condor in this way:
> when the stock hits the short strike I am hadding long ATM for another 2
> month.
>
> When it happen my Iron condor now he's Iron condor plus.
>
> I am looking from my long to cover my original risk +the risk of the long
> +% gain.
>
> Did it in the past and it is working.
>
> Keep simple.
>
> Nava Elgar
>
>
> www.GoBulls.co.il
>
> ----------------------------------------
>
> From: "cguy444" <carmelo5791@...>
> Sent: Friday, May 29, 2009 6:09 AM
> To: OptionClub@yahoogroups.com
> Subject: [TheOptionClub.com] IC Delta as an Exit/Adjustment Indicator
>
> Does anyone here use delta as one way of determining when to exit or adjust
> an Iron Condor position?
>
> I recently watched a CBOE webinar by Dan Sheridan where the topic was
> adjusting condors. He said when the delta reaches a certain point think
> "Danger Will Robinson" :-). He didn't get into too many specifics so I
> thought I'd ask the group.
>
> Thanks,
>
> Carmelo
>

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