On Tue, 3 Nov 2009 20:37:23 -0600, "mcatolico"
<mcatolico@mindsprin
>No. I'm offering my personal perspective on WHEN to make an adjustment. What
>kind of adjustment to make (and closing the position is one alternative) is
>another discussion. My point here is that there are pretty clear times that
>the market is telling you that your position is in deep doo doo. The
>rationale here is that you don't need to make any kind of exotic or
>arbitrary or assumption dependent decision. Based on the pure market
>conditions and a rather easily pre-determinable (if that's a word) criterion
>- namely the prices of other relative options - you are well prepared for
>working through most market conditions.
Michael I am still trying to get a handle on "the market is telling
you that your position is in deep doo doo". In your example below,
the value of the entire position has dropped by at least the credit
received for the -55/60 spread. Is that a special case of a "deep doo
doo" criterion you use? What does it have to do with the prices of
other relative options? Thanks.
>>Conversely, say you are in that same +45/-50/-55/
>$1.00 debit. if at some point the 45/50 vertical can be bought for a buck,
>then that?s the time you have to make a defensive move.
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