Trade Adjustments

Straddle Adjustments

Learn how to make short straddle adjustments when the position has moved against you.
Straddle Adjustments
Kirk Du Plessis
Apr 19, 2021

Because short straddles have the same ATM put and call strike it's much harder to adjust these positions. Entering these trades will usually give you a very large credit which will naturally make your break-even points wide to begin with (and therefore room to wait it out during extended runs in the stock). Should you have to make an adjustment with this type of a strategy, you are ultimately going to create an inverted strangle position and it's important not to get too carried away with aggressive adjustments. Rather, you should focus on entering the trades at much higher levels of IV and managing your profits much quicker as implied volatility drops.

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Calendar Adjustments
Learn how to adjust calendar spreads to increase the likelihood of success.

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Straddle Adjustments

Learn how to make short straddle adjustments when the position has moved against you.
Straddle Adjustments
Kirk Du Plessis
Apr 19, 2021

Because short straddles have the same ATM put and call strike it's much harder to adjust these positions. Entering these trades will usually give you a very large credit which will naturally make your break-even points wide to begin with (and therefore room to wait it out during extended runs in the stock). Should you have to make an adjustment with this type of a strategy, you are ultimately going to create an inverted strangle position and it's important not to get too carried away with aggressive adjustments. Rather, you should focus on entering the trades at much higher levels of IV and managing your profits much quicker as implied volatility drops.

No tags found.
Next lesson
Calendar Adjustments
Learn how to adjust calendar spreads to increase the likelihood of success.