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Insuring Your Trade ???

Discussion in 'Options' started by Rod M, Jun 14, 2015.

  1. Rod M

    Rod M Well-Known Member

    I am suggesting this as a future webinar topic.

    I am experimenting with various things that I have gleaned from various CD webinars in the past such as:
    CALL DEBIT SPREADS in the VXX weeklies and rolling them forward when they reach 50 percent of original value.
    PUT DEBIT SPREADS in both the weeklies and at the same date as my primary BFly trade.

    Problem is, I can insure loss, but also eat up my profit with the decaying debit spreads. Maybe some traders are more experienced at this and have an insurance trade management plan. I just dont like looking at the left side of the fly where it is falling off of the cliff. A trade that moves this far in one session may be a one in a hundred situation, but ???? thanks.
  2. Trader G

    Trader G Well-Known Member

    This hits home with the exact thing I am working through. With this one way market it is to hard think that the left side of that T+0 trade will ever come in to play. I trade M3's in the RUT and the left side really drops off later in the trade. The ATR in the RUT is basically the same as it was when it traded in the 600's. I often try to get perspective by pulling up a weekly chart and zooming out so 5 years are on one screen. It really points out that this market is very compressed and is due for some type of serious movement. I try to typically have some type of insurance on, mostly puts in the RUT. I typically do these via a backspread or a bwb with an extra put kicker (or a few). I am content to lose on them every week (they are small debits to flat money typically) and hope they never come in to play. But I would really like to hear how others are protecting their trades/portfolio.

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