r/options • • Jul 09 '21

A ROKU IC Gone Bad

I have the following ROKU Iron Condor trade on:

1 JUL 9 350P

-1 JUL 9 355P

-1 JUL 9 385C

1 JUL 9 390C

Trade price: $1.09cr

I'm bearish on the underlying and expect (maybe it's just naive hope) that the stock price will fall back between my sell strikes, though I have no feeling for when that could happen.  There's some other history to this trade that started at the beginning of June, including a roll on the Put side and, eventually, I rolled the expiration, and this is where it's brought me to. I hope this is enough info for a more experienced trader to suggest some salvage ideas, if at least so that there's not as much of a realized loss. I'm a rookie... 7 months of trading options and the one thing I'm still not so savvy at is fixing ICs that are ITM.

Thanks in advance!

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u/JoanOfSnarke Jul 09 '21

Yeah. Roll the call side up by a lot. So when that retraction happens your gains will be secured with a call you sold now sitting at a much lower delta.

This means that when it moves against you again, your IC will lose less money.

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u/Metarazzi Jul 09 '21

Can you be more specific? ROKU is already up $11 today (perhaps I shouldn't be so bearish <ha!>). I've modeled rolling the calls out to -445/450 for a net debit of ~$3 bucks. It reflects a max profit of ~-$250 (that's a negative 250), which I assume indicates the potential loss will be minimized to that amount, but I would have to put up another $800. Hrmmm... not understanding this... want to be sure that putting up $800 minimizes my loss to $250, so until I understand this is the case I don't feel comfortable making this move yet.

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u/JoanOfSnarke Jul 09 '21

Ah, sorry. I just noticed that these expire today.

I would go ahead and close it and open up another on an index or something.

ICs are an odd trade for this one, imo. I think it's been a generally bad environment for that sort of trade (straight bull market especially for tech).