I am trying to understand based on my position whether I am just digging myself into a deeper hole by delta hedging and should just cut my losses.
I sold one straddle on /GC at 2415 (expiring 17 June) where I placed buy and sell stop orders for 1 contract on either side equal to the amount or premium I got for each side. /GC rose and hit the buy stop but then turned around and has been plummeting since. I've since sold 3 more calls at 2415 and my delta is still at 65. Gamma is -1.7, long theta and short vega (unless IV falls, I am losing more on the vega each day then I'm gaining on the theta). So current position is short 4 calls at 2415, short 1 put at 2415 and long 1 contract at 2469.
Do I continue to delta hedge if /GC continues to fall? Do I wait until 21 or 14 DTE and re-evaluate at that time? Do I just cut my losses and move on?
Thank you!!
Continue to Delta Hedge, or Cut my Losses
byu/howling-at-the-sun inoptions
Posted by howling-at-the-sun
2 Comments
You run this through the trade simulator?
What is your opinion on what will happen the price of gold? or you just selling theta with no opinion on the underlying?
just FYI, you hedge an options strategy (rendering it delta neutral) using stock, not options.. Also, ditch the trade ASAP – it’s absolute junk.