Thanks so much for Ron's contribution to the site. Just wondering if anyone has used the space trip trade to hedge a massive upside move.
The challenge with doing anything on the call side is that there just is not enough premium there. I have tried playing with upside hedges similar to the STT, and the further out of the money credit spreads do not have enough premium to pay for the closer to the money debit spreads. In the STT you have a very small debit, that is easy to raise to breakeven or above with time. With the upside STT, to get enough positive delta, you would have a very large debit that would be almost impossible to raise to breakeven, and would be very negative theta. At least this is what I have encountered in my attempts at upside hedging.