Gaming the Options in GameStop

I have a position in $GME for the long-term account (since 05/22/2014). I currently own the following:

  • I am long the October 41/46 Call Spread
  • I am short the September 26 weekly 43 Calls (2x)
  • This created a Split Call Fly

Do what?

GME

The above graphic shows this latest trade adjustment where I decided to take advantage of the volatility this week to sell some premium. The goal here was to take in some Weekly premium that I thought had a good chance to expire – thus boosting my Options Net. This did not take margin.

Price is currently hovering below $43 so these short Calls have a great change to go poof (and I can then consider doing this again next week, etc).

Just one way to “trade around” a core position.

 

Switching to Offense in the game of trading in GameStop

One key element in successful trading is in knowing when a trade needs to be adjusted. In order for this to occur efficiently, the initial trade design needs to provide some flexibility to maneuver. I have a half position left in $GME & coming in to today this is what it looked like:

Short stock
Short the June 31 Put
Long the 32 Call
The 2 Option pieces are viewed as a Bear Collar

The stock has been pushing up this week & today it hit my trail stop on the stock piece. This left me with the 2 Option pieces noted above — which now become a regular Risk Reversal trade given that there is no stock piece.

Now the trade is on offense.

You can view the Position Updates post from this past weekend for more details on the initial trade.