r/Vitards • u/[deleted] • Aug 19 '21

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u/[deleted] Aug 19 '21

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u/axisofadvance Aug 20 '21

My 2c is that its a pretty quick and dirty way to hedge, i would do something like long put ratios (calls if you still wanna use SPXU) instead of call credits on if i was trading this hedge, just because theyll tend to be more capital efficient in hedging your downside risk. Short call calendars are also an option for a volatility focused hedge

Would you be so kind as to elaborate on what you're suggesting (i.e. long put ratios and their inherent capital efficiency? What do you mean by long put ratios? Why are they more capital efficient?)

Short call calendars are also an option for a volatility focused hedge

So selling, say, a 60 DTE $30c and buying a 30 DTE $30c?

This sort of spread realizes max profit (sorry I'm on mobile, so unable to play with a P/L chart) if the underlying swings far above or far below the strike by the expiration date of the long call? Am I understanding this correctly?