Short Strangle Option Strategy - How To Make Adjustments

Let's assume a stock is trading at $50 and you have the $45 put and $55 call strangle. If the stock rallies up closer to $55 call side you would move UP the put side from $45 to $48 or something along those lines.

And unlike what you've probably been told before in the past you should never move the side of the strategy that the market is moving towards. In our example above you would never move the $55 call higher.

Rolling one side out and up only opens up the door for compounding losses should the stock continue to move in that direction.

[warever]

if the stock is going down, and u adjust the Call side to make it closer to the market, this doesn't mean ur Put side's Prob. ITM is gonna decrease, and even if the BEP on the down side has moved to a lower level, this doesn't guarantee not getting assigned on ur Put if it gets ITM.

[lakayonx]

Ok, then at what point do you adjust the "losing side" of your position? sorry, I didnt get that very clear. Thank you.

[keyholder]

Great video man. Was wondering if it would make sense to keep going back and forth (raising the put side when there's an increase and rolling the call down when there's a decrease in prices) all the way to the option expiration date?

[elistn]

Great and important video, thank you!
After the roll in the SPY example, we have a short put leg with 30 delta, and a short call leg with 15 delta.... so we're no longer neutral, right?

[satsirikhalsa]

could you sell short 100 shares if the stock is dropping toward your put, turning it into a covered put?

[gongthepbunyong]

Hi
My problem is when I'm trading index option the stock fall too fast so the money I get from short call don't cover the lose from short put.
How can I solve this problem?
And is there a problem if I roll the Short call over and over so it's lower than short put I made int the first place. And what's the end?