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KRE: 02.24.20 – 03.23.20

ETF | Banking Fund | Status: Closed

Adjustment #3

View original trade
03.06.20
This morning opened with a really nasty
expansion, and KRE is significantly lower. It's dropped almost $10 since I first established the position. That's nearly 20%! This position is ugly, but if I'd been trading shares alone I'd be losing about twice as much as I currently am. That certainly puts things into perspective for me.
Today is one of those days where disciplined
are extremely important. Because I have a pre-determined plan, I am able to make fast decisions without emotion or blind guesses – even when things get bad. I did not hesitate to
my
down to reduce my
risk and collect more
Extrinsic value is important in situations like this because it will eventually allow me to recover some of my losses without depending on KRE bouncing back to it's original level. Unfortunately, this position is beyond profitability as it currently stands, however I'm still in a strong position to make back much of my losses simply through volatility contraction and the
An up move would certainly help speed up that process, but is not necessarily required.
At this point, I am just doing damage control for this position. My goal is to reduce my loss by as much as possible. Perhaps down the road I might find a way to bring back profit potential, but for now I'm just dealing with the issue at hand.

Risk Profile:

Figure 4

Strategy: Roll Down Call

btc 1 apr 17 48 call
sto 1 apr 17 44 call
Fill Price: $1.88 credit

Position Analysis

U/L Price: $44.20
IV: 52.0%
IVR: 116.8
Liquidity: 4/4
Position: Short APR 17 44/51 Inverted Strangle
POP: 0%
Cost Basis: $6.02
Risk: Undefined
BPR: $1320
Max Profit: -$0.98
Max Loss: Unlimited
Target P/L: Smaller loss
Extrinsic Value: $334.00
Net Delta: 24.44
Net Theta: 5.459

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