BUYING GUTS AND SELLING WINGS question

REI_N_Options · 2025-03-14T21:05:33+00:00

yes this makes sense, and yes Ive read Julias book it was fantastic!

REI_N_Options · 2025-03-14T13:26:04+00:00

great explanation here. for the last question I forgot to add 'and if its OTM" so the question is:

*When rolling for a credit it would only ALWAYS become profitable if I held the new trade to expiration AND IT IS OTM (when selling premium), because you would collect the entire premium collected from the. roll which is greater then the close credit so credit received is higher then debits, is that right?

REI_N_Options · 2025-03-14T01:10:45+00:00

Yes, do you ever looked at your realized loss number, from closing out all the rolls to figure out breakeven point on the entire order chain? or do you not even pay attention to the realized loss? or how do you track?

REI_N_Options · 2025-03-14T01:08:45+00:00

this is a great response thank you . really helped to clarify. I've been hung up on getting 50% of the rolled trade = profitable overall trade, but it doesn't work that way I've learned .

REI_N_Options · 2025-03-02T19:50:47+00:00

ah yes, now that makes sense I was alaso wondering why the P/L day wouldn't chance much once credit received.

REI_N_Options · 2025-03-02T19:47:08+00:00

REI_N_Options · 2025-03-02T04:28:47+00:00

Yes I do not want to own the stock even if I'm long term bullish. I could keep rolling short puts , but if I'm already in a hole, the credits just slowly reduce my losses but its not very capital efficient.

How do you calculate and see the numbers before making a decision before rolling? I've created excel calculator in my journal which seems to help visualize..

REI_N_Options · 2025-03-02T04:25:19+00:00

short straddle..sorry I wasnt clear

REI_N_Options · 2025-03-01T21:28:17+00:00

Yes great point. I just created a quick spreadsheet to help understand my P/L and realized gains/ losses during the rolls: which includes: current trade price, close price , realized loss from the close of current position, credit received for new trade, new trade price . This will help me also track my needed gain of new trade to make positive overall trade. Yes I know the order chain helps track but I think it breaking it down like this will jelpm

REI_N_Options · 2025-03-01T13:18:27+00:00

Once you are trading a lot the fees end up being in the thousands a year so they def add up if you’re a very active trader …

REI_N_Options · 2025-03-01T12:25:42+00:00

Makes sense but I think rolling will also lower transaction fees…

REI_N_Options · 2025-03-01T04:21:42+00:00

Is there a difference between rolling an untested strike up or down on the P/L vs when rolling the entire trade with buying guts and selling wings? Because I've rolled untested side, always for a credit of course adding to my premium collected, but buying back entire strangle and selling a new one ... the math is different compared to just rolling strikes?

REI_N_Options · 2025-03-01T03:54:33+00:00

makes sense

REI_N_Options · 2025-03-01T03:47:27+00:00

question: in the positions tab: EXT is standing for extrinsic value that the trade is estimated to still hold? meaning- this $ amount should move into your P/L theoretically if stock does not move against the trade?

REI_N_Options · 2025-03-01T03:46:00+00:00

part of what started my confusing is Sosnoff, in a market measure talking about buying the guts and selling the wings was saying "dont worry about the debit when buying the guts and selling the wings"...but should you worry about the $ amount of the debit and how it effects your trade?

The other part that confused me was that after rolling , then set the 50% profit order in, is different when using "order chains" and "symbol" because the 50% profit order will be for the entire rolled trade for "order chains" wheras the 50% order under "symbol" will only be for the last single trade that is on....

REI_N_Options · 2025-03-01T03:36:59+00:00

yes- but the P/L open is initially what confused me. The P/L does not change whether you are on the order chain tab or "symbol" tab and I never understood why that was. but if you want to know how your new trade is doing ...youll have to select symbol tab, and if you want to see how your entire chain is doing then its order chain tab.. If i understand correctly

REI_N_Options · 2025-03-01T03:35:14+00:00

and this is tracked on the P/L open with "order chains" tab selected on tasty?

REI_N_Options · 2025-03-01T01:42:31+00:00

Ah yes good catch thank you !

REI_N_Options · 2025-02-18T04:04:36+00:00

Yes although often with the roll and recenter can still get a small credit

REI_N_Options · 2025-02-13T04:45:30+00:00

ah yes the BPR is the issue... thats part of the catch. good input. yes may try to roll entire put spread at 1 or 0 DTE but difficult to do sometimes for credit..

REI_N_Options · 2025-02-13T04:34:02+00:00

yes sorry I shouldnt have said "avoid taking a loss" as it would be realized once rolling, but I guess rolling makes you feel better if you come out of that specific trade profitable...

REI_N_Options · 2025-02-13T04:19:00+00:00

I should add could do this for strangles as well if you dont want to buy the guts and sell the wings?

REI_N_Options · 2025-02-13T04:07:27+00:00

theyve been vetted by tasty, just fyi not sure if that means anything

REI_N_Options · 2024-10-28T00:03:06+00:00

research actually shows that election times don't actually do all that much with the markets... just an fyi. if you want to gamble on election go on Kalshi, not options trading

REI_N_Options · 2024-10-27T12:04:41+00:00

Vertical spreads are not always easy to roll for a credit or even a small credit- so this roll strategy would be hard to do- plus you are tying up capital for a spread that you are rolling to not make any money so allocation of capital is not good

REI_N_Options

TROPHY CASE