Friday, October 9, 2020

How to lock in a gain on that short while keeping it open

If anyone is curious about what I did with yesterday's trade, I walked it down the hill. Of course the sizeable gain on the short is tempting, but my goal is to keep this open and continue chomping bites off the downside, so long as market conditions allow.  Here is a write-up of the trade I described yesterday and today's changes.

As you can see, if next week the VIX-cano erupts, I can just exercise those calls and close the whole thing out.  Margin requirements would also increase on the position, should a rocky week force me to wait it out through share prices higher than the strike of my most-recently bought calls.  

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