OPENING: GC1! NOV 25TH 1595/1605 SHORT CALL VERTICAL
... for a 1.10 ($110) credit.
Notes: An adjustment trade, adding some short delta to my October position, which has drifted slightly long. Because October only has 31 days left in it, I'm going out another month with my hedge since a similarly delta'd spread farther out in time is more distant from current price than the same delta'd spread sold in shorter duration, so I'm less likely to get whipsawed. Will look to take the whole package off -- the October iron condor and the November short call vertical -- at the same time. I got the original iron condor filled for 1.60, so my scratch point on the whole thing is 2.70. My original profit target was to make .80, so will start to look to take profit when the whole position is at 1.90.
The additional advantage with /GC is that it's in little bit of contango, so I get a slight additional edge or room to be wrong by selling the hedge out in time. This is because the delta of the strikes is relative to where the corresponding futures contract is trading, and November is trading a little bit higher than October, December a bit higher than November, and so on. This naturally isn't always in the case in every commodity. With /CL, for example, it would less of an advantage to hedge farther out in time because it's currently in backwardation.
Notes: An adjustment trade, adding some short delta to my October position, which has drifted slightly long. Because October only has 31 days left in it, I'm going out another month with my hedge since a similarly delta'd spread farther out in time is more distant from current price than the same delta'd spread sold in shorter duration, so I'm less likely to get whipsawed. Will look to take the whole package off -- the October iron condor and the November short call vertical -- at the same time. I got the original iron condor filled for 1.60, so my scratch point on the whole thing is 2.70. My original profit target was to make .80, so will start to look to take profit when the whole position is at 1.90.
The additional advantage with /GC is that it's in little bit of contango, so I get a slight additional edge or room to be wrong by selling the hedge out in time. This is because the delta of the strikes is relative to where the corresponding futures contract is trading, and November is trading a little bit higher than October, December a bit higher than November, and so on. This naturally isn't always in the case in every commodity. With /CL, for example, it would less of an advantage to hedge farther out in time because it's currently in backwardation.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.