SLB Strangle - 🔥 HotTrade - Adjustment #2
Close for a loss, or roll the dice and adjust again
I’d love to see SLB reverse around here and end up somewhere between the 2 blue lines (42.50 - 45.00). Closing at this point for -$286 wouldn’t be the end of world, but I’m willing to risk ownership or a bit more for a bounce over the next week. Nothing wrong with closing here though.
Quick recap of how we got here:
5/25 - we opened a short 37.5 put and a short 52.5 call for 1.62 credit out to July 15th.
6/7 - we rolled up the 37.5 put to a 42.5 put for a .49 credit
6/16 (today) we rolled down the 52.5 call down to a 45 call for a .49 credit
In total, we’ve collected 2.60 in premium, but the trade is worth -5.46, putting us at a negative -2.86 if we were to close today (-$286).
Here’s my thinking: We have 29 more days until expiration, and I usually close my trades at 21 days to expiration, so I am OK waiting another week if SLB doesn’t go down too much further. This will give some time for SLB to perhaps recover. If not, I could 1) close for a larger loss, or 2) end up owning it for $4,250 (price of put) - $260 (total credit received) = $3,990 and I’m currently OK with that as a long term buy and hold.
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