Put Spread Adjustments

This the first put spread adjustment you should make to reduce your overall risk in the trade.
Put Spread Adjustments
Kirk Du Plessis
Apr 19, 2021

After entering on a put credit spread trade, if you have a stock that continues to fall against your position the first adjustment that you should make is to sell a corresponding call spread above the market and take in more credit. Similar to how we mechanically make this adjustment with credit call spreads, the trigger for this adjustment in our system is when the short put strike reaches a 0.30 delta. When you keep the number of contracts exactly the same as well as the width of the strikes you take no additional risk and increase your possible profit should the stock remain range bound inside your new iron condor.

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Strangle Adjustments
Learn how to make short strangle adjustments to reduce risk. The key is to stay patient and unemotional.

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Put Spread Adjustments

This the first put spread adjustment you should make to reduce your overall risk in the trade.
Put Spread Adjustments
Kirk Du Plessis
Apr 19, 2021

After entering on a put credit spread trade, if you have a stock that continues to fall against your position the first adjustment that you should make is to sell a corresponding call spread above the market and take in more credit. Similar to how we mechanically make this adjustment with credit call spreads, the trigger for this adjustment in our system is when the short put strike reaches a 0.30 delta. When you keep the number of contracts exactly the same as well as the width of the strikes you take no additional risk and increase your possible profit should the stock remain range bound inside your new iron condor.

No tags found.
Next lesson
Strangle Adjustments
Learn how to make short strangle adjustments to reduce risk. The key is to stay patient and unemotional.