Someone trading es would talk about how to deal with es bs difference? Traders trade es dont realli be bother with the bs differences They talk abt adjustment like bs differenceis not a problem Say you sell a credit spread 2520/2500 for 0.5 and and want to roll to 2430/2410 Buy back the trade cost 1.75 and you would have lost 1.25 on buy back credit spread The bs difference is more double of the credit 0.5 How would traders who trade es do adjustments?
What does "bs" stand for ?
I think I know but I don't want to assume
As far as the trade goes the math is correct you would lock in a loss of 1.25 but you would also get a small credit from the new trade 2430/2410
Is this a real trade or just a random example ?
I was just trying to imagine if this was a real trade why would anyone would roll down now as the prices are going up and why roll down that much unless this was some kind of panic situation ? Just curious