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Wednesday, July 8, 2009

How to Rescue my Straddle???

This situation is now my 2628 Buy 3 pairs of Long Dec @30 straddle which are losing money. Now is losing around $3xxx. The IV is diminishing and today the IV is just slightly back to 40. The time decay kills my portfolio. The question is how to rescue my straddle?

My thought is this:
1) short more options to gain time decay value.
2) cut loss. This is not my type and I am still patience.

so the strategy shall use option 1:
to do this I have done short put
July @ 29 * 2
Sep @ 25 * 4
it is called (Reserve) Ratio Calender Spread/ Calender Straddle.........

Check these out..........good posts

I thought the market will rebound tomorrow and then drop back, so i didn't do any short call. Now the ADR is dropping, the situation is not good for me, cos i didn't hedge my portfolio. The HFI OI is increased, vol was slightly increase in morning session and relatively small in pm session which was the rebound.

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