LRCX rollover as a Condor

How to view the entire chart:


1. Try clicking on the name of the most recent article in the column on the right. This will remove the "Archives" list.
2. Try right click on the chart itself and open it on a separate window.


I am sorry that I cannot always make the chart small enough to fit neatly on the left column. I want you to be able to see the details I want to point out.


I Hope this helps,


Juan

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Because LRCX is now in rally mode, toward the strike price of my trade, and because of the favorable IV ratio between March and April calls, I decided to roll over the trade, eventhough is losing money currently. I don't recommend adjusting losing trades, so if I did not feel confident that the rally will help the trade, I would simple exit it at a loss. Here exected condor. See how 3 of the 4 legs were executed in my favor



Here is the resulting trade, modified.


You can reduce the complexity of the trade in Platinum, by calculating the credit/(debit) resulting from the rollover and assigning it to your long costs. In the example, the call rollover resulted in a credit, we calculate the credit in dollars, and reduce the cost of the lon calls accordingly. The put rollover resulted in a loss, so we use that loss to ADD to the cost of my long puts. If you'd like a copy of the spreadsheet, just send me an e-mail: paperprofit1@mac.com and I will send you a copy so you can enter your own numbers.



I eliminate the March trades from my risk graph, while reducing/(increasing) the cost of my long options. Note that the DEBIT of the whole trade has not changed and that the risk graph looks very much the same. My modification did not alter the data on the trade, but reduced the number of legs.



By the way, OptionsXpress allows you to change the cost-basis of your trades online, so you have a clearer idea of what your gain/(loss) is for each trade as you do your rollovers.

To do that, click on the "Cost Basis" tab in the "positions" page, or better yet, just ask them to instruct you. I just want you to know that you could do that.