Hi Steemians,
markets keep going up and my short August 169 call in my IWM Aug 159/169 strangle was hit today.
The standard protocol would be rolling up the 159 put to the 169 strike and create a straddle in order to neutralize my deltas, like in the pictures below.
There is nothing wrong with this defensive move.
But I collected $4.08 in the first place for this strangle.
So my overall credit would be $6.14 for the straddle.
But the straddle is trading for $5.93 at the moment, as you can see in the picture above.
So a 21 cents winner ($21 per one lot).
Therefore I closed my IWM August 159/169 short strangle and booked a 26 cent winner ($26 per one lot), as you can see in the picture below.
And opened a new position:
New IWM 30 Strangle:
My profit target for this strangle is 50% of max profit ($130), so I'm going to close this strangle, when it trades for $1.30.
Good luck trading,
Stephan Haller
Legal disclaimer: These are not trade recommendations. Options involve risk and are not suitable for all investors. The trades shown above are for educational purpose only.