Each month I have an extra busy week when Options are expiring for the month. I typically create a plan (you can see it here) and then just work through the plan during the week when appropriate (and/or advantageous).
There are ALWAYS surprises (this week was $RMTI) but it is usually the same process to exit/adjust positions. I thought I would show some under-the-hood info on how I go about doing an adjustment. To illustrate, let’s look at a chart of $ADT:
This is a Submarine Basket positions where I am short the December 40 Straddle (1/2 size each). I have a Options cushion of $2.39. I was long stock but exited that piece on 12/11. Here is what the December Options chain looks like now:
As you can see price is hovering right at the $40 strike (a Pin) but there is still some premium in the pricing (would cost roughly $.40 to BtC it here). On a Pin at $40 this will go to $.05 near the close so I want to patient here and not adjust to January just yet.
Patience while the day progresses to burn off the rest of the premium for December is the key. The January $40 Straddle is currently priced at $2.10