Rolagem short Strangle bova11, put ITM, pouca liquidez

Summary

In this video, the creator discusses their monthly strategy for managing options trades, specifically rolling over short puts and calls. Over the past months, the strategy has faced challenges due to the falling price of BOVA, causing a deterioration in the trade's performance. The video outlines a tough decision-making process, where the creator opts to adjust strike prices to manage the risk and avoid further losses. They explain the steps taken to maintain the trade's viability and emphasize the importance of timing and adjustments to minimize potential damage, while sharing insights on how they plan to recover.

Takeaways

• 😀 The video creator discusses an ongoing strategy involving options trading, focusing on rolling shorts and managing positions each month.
• 😀 The strategy was initially successful, with consistent returns of around R 140 to R 150, but recently has faced challenges due to a market downturn.
• 😀 The current position involves being short on a 123 strike and selling a call at a 125 strike, with the market at 116.
• 😀 The creator reflects on previous actions, noting that waiting longer for a better roll would have been more advantageous.
• 😀 The main strategy now is to avoid worsening the current strike and instead adjust the call strike while keeping the put strike at 123.
• 😀 There is a consideration to increase the position size from 100 to 200 contracts, but only if the market recovers and the strategy improves.
• 😀 The video shows an in-depth step-by-step process of managing the position, including buying and selling options to adjust strikes and manage risks.
• 😀 The creator discusses the impact of spreads between buy and sell prices and how these affect the trade's profitability.
• 😀 A detailed manual approach is taken to execute trades, instead of using automatic tools due to unfavorable spreads.
• 😀 The creator emphasizes the importance of time, explaining that the goal is to gain time for the market to recover before the next roll in February.
• 😀 In the worst-case scenario, the creator plans to buy the underlying asset and use covered calls to recover, but this is seen as a last resort.

Q & A

What is the main focus of the video?

The main focus of the video is discussing the process of rolling options for the BOVA11 stock, specifically dealing with a challenging market situation where the stock price has dropped significantly.

Why did the speaker choose not to improve the strike price in the current trade?

The speaker chose not to improve the strike price because doing so would require paying a significant amount, which wasn't a viable option. Instead, they decided to keep the strike price for puts and roll the call strike.

What is a key element of the strategy being discussed?

A key element of the strategy is managing the Delta of options, aiming to maintain it around 30, and receiving premiums by selling calls and puts monthly, while making adjustments based on market movements.

What caused the situation to worsen with the rolling strategy?

The situation worsened because the underlying stock, BOVA11, continued to decline in price over the past two months, which resulted in more unfavorable options rollovers and increased risk in the trade.

Why did the speaker consider crossing the strikes during the roll?

The speaker considered crossing the strikes as a way to make the trade feasible, even though it increased the risk. This was a necessary action due to the lack of better alternatives given the market situation.

What did the speaker mean by ‘straddle’ in the context of this trade?

A 'straddle' refers to a strategy where the trader sells both a call and a put at the same strike price, which could have been a better option if the market had allowed for it during the previous rollover, but it was not feasible in this case.

What alternatives did the speaker explore for the current trade?

The speaker explored several alternatives, including rolling the options down, crossing the strikes, and even increasing the position size to 200 contracts. However, they ultimately decided to maintain the same number of contracts and simply adjust the strike prices.

What is the risk associated with crossing the strikes?

Crossing the strikes increases the risk because it can make it more difficult to recover from a position if the stock moves further in the wrong direction, leading to larger losses or more difficult adjustments in future rollovers.

Why does the speaker focus on managing the position with minimal cost?

The speaker aims to manage the position with minimal cost to avoid unnecessary losses and to buy more time in the hopes that the stock price will recover. Their goal is to keep the strategy cost-neutral, allowing flexibility in future decisions.

What are the implications of a stock price continuing to drop for this options strategy?

If the stock price continues to drop, the strategy will face increasing difficulties. The options will become less favorable, the cost of rolling will increase, and the risk of losses will grow. The speaker is hoping for a stock price recovery to improve the trade's outcome.