Options strategies - In this thread I will explain how a profitable CE buy position can be adjusted to reduce risk. Guess my choice. I will reveal it tomorrow.
1) I had taken a 20100CE long today at 111.2 about an hour before close.
1) I had taken a 20100CE long today at 111.2 about an hour before close.
2) Shift 20100CE to 20200CE (50 delta to 40 delta). The payoff will be like this.
Max risk reduced to half
Max risk reduced to half
3) Convert to a bull call spread.
* Shift 20100CE to 20200CE
* Short 20300CE - same qty
* Shift 20100CE to 20200CE
* Short 20300CE - same qty
4) Convert to a butterfly with moderately bullish view
* Shift to 20100CE to 20200CE
* Short double qty 20300CE
* Buy 20400CE - same qty
Payoff will look like this
* Shift to 20100CE to 20200CE
* Short double qty 20300CE
* Buy 20400CE - same qty
Payoff will look like this
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