Bring in the Closer!

So today was Day 2 of my first “campaign” of 2021 in this new $SPY strategy that I’m tinkering with.

With the short options in this position not expiring until tomorrow, I used today’s action to adjust my position — bringing in some cashflow and neutralizing my delta. I think this will become a running theme on all non-expiration trading days going forward. (Keep in mind, $SPY lists weekly options expiring every Monday, Wednesday, & Friday). It’s kind of like bringing in the relief pitcher (aka, “The Closer) to bring the game home.

While recording the video below, I erroneously commented that I reduced the total risk in this trade. This is not true. I actually increased it from $866 to $1,111 due to the fact that I rolled the short call down. True that I reduced risk on the “down” side if SPY is to sell off. But my upside risk was increased.

Either way, it was still a smart adjustment to make as at the time, our position was showing a positive delta and the adjustment brought the position delta back to near zero. Of course, the market later rallied, but we’re still looking good.

Provided no big moves before midday tomorrow, I’ll be looking to close this entire trade down for a profit, then beginning our 2nd “campaign” of the new year.

~ @chicagosean