Rolagem, Put dentro do dinheiro

Summary

In this video, the presenter walks through a short strangle options strategy using BOVA11, an ETF. The strategy involves selling out-of-the-money puts and calls to generate consistent profits. Due to recent market conditions, the speaker needs to adjust their strike prices as BOVA has fallen into the money. They demonstrate how to roll over the position, adjusting strikes, and managing margin. The video offers valuable insights into options trading adjustments and emphasizes the importance of market analysis for optimizing returns.

Takeaways

• 😀 The video focuses on a short strangle options strategy with BOVA11, a Brazilian ETF tracking the Bovespa index.
• 😀 The short strangle strategy involves selling both calls and puts on BOVA11 to profit from premium collection.
• 😀 The trade is adjusted monthly, and the strategy has been consistently profitable in the past 8 months.
• 😀 This month's trade was less ideal due to BOVA11 dropping, putting the positions 'in the money' (ITM) and requiring adjustments.
• 😀 The adjustment process involves rolling the options to a later expiration date and changing the strike prices to accommodate market changes.
• 😀 The strikes were adjusted to make the position more flexible and to manage risk better, with an emphasis on keeping the positions manageable.
• 😀 The key strike prices for the short strangle are moved closer to the underlying asset’s price to maintain the trade within a manageable range.
• 😀 A potential shift to a 'straddle' (same strike for both call and put) is discussed but ultimately avoided due to the risk of being too close to the money.
• 😀 Margin requirements for the adjusted positions were calculated, and the margin impact was confirmed at R$ 2367.
• 😀 The video ends with an invitation to viewers to subscribe for future updates on the strategy, including the planned increase in position size to 200 contracts next month.

Q & A

What is the main topic of the video?

The main topic of the video is about executing and managing a short strangle options strategy using the BOVA11 stock, a Brazilian ETF. The video focuses on rolling the position, adjusting strike prices, and managing risks associated with the strategy.

What is a short strangle, and why is it used in this video?

A short strangle involves selling both a put option and a call option with different strike prices but the same expiration date. It is used here as a way to profit from a range-bound market, where the price of BOVA11 remains between the two strike prices.

Why is the short strangle strategy adjusted this month?

The strategy is adjusted because BOVA11 has dropped significantly in value and is now in-the-money (ITM), making the position riskier. The strikes are being adjusted to reflect the current market conditions and mitigate potential losses.

What are the current strike prices for the short strangle position?

The current strike prices are 123 for the put option and 125 for the call option. These adjustments aim to widen the range for BOVA11’s price movement, with the goal of managing the risk of the short strangle strategy.

How does the Delta play a role in determining the strike prices for this strategy?

Delta is used to select the strike prices for options that are approximately 30 deltas away from the current price. This is intended to create a manageable risk/reward scenario, with the options being close enough to the market to generate premium but not so close as to make the strategy too risky.

What is the reasoning behind choosing a larger strike range for the short strangle this month?

The reasoning is to provide a greater cushion for BOVA11's price fluctuations. By increasing the range between the strike prices (put at 123 and call at 125), the strategy is better protected against market volatility while still allowing for the collection of premium.

What is the main risk associated with the short call position in this strategy?

The main risk associated with the short call position is unlimited potential losses if the price of BOVA11 rises significantly above the strike price of 125. This is because the call option is sold uncovered (naked), meaning there is no offsetting position to limit potential losses.

What does the speaker mean by 'rolling' the options?

Rolling refers to the process of closing an existing options position and opening a new one with different strike prices or expiration dates. In this video, the speaker is rolling the short strangle to adjust the positions in response to market movements.

What is the goal of the rolling strategy in this scenario?

The goal of rolling the options is to adjust the strike prices and expiration dates to better align with the current market conditions, while still receiving premium from the options sold. The strategy aims to manage risk and position for potential profit as BOVA11 moves within the new strike range.

How does the speaker decide on the new strike prices for the roll?

The speaker decides on the new strike prices based on the current market price of BOVA11 (around 122), and adjusts them to provide a more suitable range for price movement. The chosen strikes (123 for the put and 125 for the call) are designed to give a balanced risk/reward profile, with a wider range to accommodate potential volatility.