I make an effort each week to do a more thorough review of existing trades on Wednesday (mid-week review) — a check-up if you will. One of the more active trades that I have over the past few months is in $EWW. Here is some entries from my Trading Journal:
This trade was a common approach I use where I am long (or short) stock and then I sell a Straddle or Strangle. The premium is then used to build a cushion, and I don’t mind having to make adjustments. I initiated this trade in early March and as you can see it has burned a lot of energy to stay put. LoL.
Here is a breakdown:
- I am long at $65 (trading currently at $66.2)
- I am currently short the September 65 Straddle (the Calls are covered, Puts are not)
- The net on Options is currently at + $8.9 so this is an enormous cushion to work with
I will be adjusting to October soon but am in no rush this week to do so. The plan is to sell the 65 Straddle again for October, buy back the September one.