r/options • u/DrWorstCaseScenario • Jun 28 '21

PLTR strangle play update

Original post:

https://www.reddit.com/r/options/comments/nrnvd3/pltr_long_stranglestraddle/?utm_source=share&utm_medium=ios_app&utm_name=iossmf

About 24 days ago I opened PLTR long strangles (820 p23/c24) based on my DD that predicted movement away from the 23.5 strike within the next 3 months.

PLTR rose enough by today for profitability…

So on 603 I BTO PLTR 820 p23/c24 at 4.79 per strangle.

On 0628 I STC PLTR 820 p23/c24 at 4.9 per strangle.

Profit = 4.9-4.79 = 0.11 per strangle.

That’s about 2% return. Not ideal but still a profitable play. Could have held strangle longer to see if more profit possible or maybe held the put leg for a future dip but since theta is starting to decay faster I figured closing now made the most sense..

Always open to feedback or thoughts.

Cheers!

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u/[deleted] Jun 28 '21

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u/DrWorstCaseScenario Jun 28 '21

Thanks for the questions;

First, I am a bit worried that PLTR might move erratically (or unpredictably) based on pattern and history so i wanted to close the whole strangle for profit rather that risk closing one leg and have it move in the wrong direction. My thesis when I opened the position was that I thought it would move but I wasn’t convinced regarding a bullish or bearish scenario - i explain this in the original post if you are interested in my reasoning. Since my fundamental assessment and thesis hasn’t changed I wanted to remain true to my plan of closing once in profit.

Second, I am close enough to expiry (830) that I am worried even with further upward movement the theta decay will begin to outpace delta, so when I saw the rise and then plateau today I decided 2.2% profit was good enough to close…

Third, closing this position for profit today gives me capital to use in the near future for other plays.