[TheOptionClub.com] Re: BWB adjustment plan

 

Joey

Hi, it looks as though TLT has tested the 89 strike a few times over the last week or so, which if it breaks below this may give you a little concern.

In order to play with various adjustment scenarios it would be interesting to know when/why you set the position up and whether your market opinion has changed.

I would tend to view your position as being a combination of

Long Put Verticals: -10 98p / +10 90p
ShortPut Verticals: +20 87p / -20 89p

In essence you have 10 x 1 strike wide Long Put Verticals, which have been financed by selling twice as many, 20 x 2 strike wide Short Put Verticals.

All the risk is in the 20 lot short put verticals, if the market breaks below 89.

Are you really not planning to make any adjustment if this happens and sit tight through to expiry or do you have a plan up your sleeve if this happens?

Cheers
James

--- In OptionClub@yahoogroups.com, "naguse" <trading.ocyg@...> wrote:
>
> Hey gang,
>
> Just wanted to pull some thoughts on a trade I have in play, right now I am not planning on doing anything but wanted to know if I am missing something... like being able to adjust the trade to make it better.
>
> TLT
>
> +10 TLT Jan 2010 90 PUT
> -30 TLT Jan 2010 89 PUT
> +20 TLT Jan 2010 87 PUT
>
> trade initiated at a 0.35 credit.
>
> thanks for any input.
>
> Joey
>

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