Getting Assigned on a Collar, Positive Theta on Protected Positions, Conversions and More!

Getting Assigned on a Collar, Positive Theta on Protected Positions, Conversions and More!

Sorry for the delay, I got tied up in other projects this week!

In any case, here is your archive from our Open Discussion session on Friday, June 28th. Below is a summary of the content in this video:

1. Jerome: I just sold a call against my Married Put. If I allow the call to be assigned and lose the shares, what do I do now? (1:05-13:30)
– We discuss what options Jerome would have, now that just the put remains following the discussion in The Blueprint. Buy more shares, close the put…or, other alternatives?

2. Bob: I have been using PowerOptions for years and love the tools. But would love to see Ratio Spreads, Call and Put Butterflies and Condors… (13:45 to 19:35)
– We discuss the potential of adding new strategies and tools, and what we might have planned for the future.

3. Fernando: Is there a way to start a Protected, Directional position with a Positive Theta? (20:05 to 34:25)
– We review the Married Put setup (or any married put) discuss the negative Theta of that structure, how we could convert that to a positive Theta but…does the new structure match your goals for the trade?

4. Darrell: I am long 500 shares of UTHR. I was thinking of selling 20 ATM calls and buying 15 OTM calls (a covered call with a Bear Call spread). What happens if the sold ATM calls are assigned? (34:30 to 39.01)
– We analyze the setup, discuss what would happen if the 20 shorts were assigned and the 15 longs expired.

5. Darrell: Does the site offer a trade tracker / trade journal? (39:05 to 46:45)
– Yes! We add the UTHR position to the Portfolio tools, and illustrate how the Trade Journal is set up for you automatically (in the Notes), and how to add more information to your transactions.

6. Fernando: Earlier you mentioned a Conversion: When would one use it? (50:25 to 1:00:15)
– We take a look at the Conversion form of a Collar trade, the pros and cons, and why it might not be the best approach for retail investors.

7. Darrell: Follow up: With my ratio Bear Call spread, should I exercise my long calls? (1:00:25 to 1:04:00)
– Only if they are ITM (stock above both strikes) and you need to clear out the short stock position from being assigned on the short calls.

8. End – Wrap Up (1:04:05 to End).

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