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Exit sequences

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6 replies, 6 voices Last updated by Raymond Joseph 5 years, 5 months ago
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    • #2269

      Raymond Joseph
      Participant
      @rjosephlaw@gmail.com
      Points: 1 126
      Going to The Trading Triangle LIVE 201630 Day Affirmation Challenge
      Rank: Sophomore

      I agree with many of the above, including Bryan’s comment about taking off the trade when you get a pop in profits. I guess it’s a hard lesson to learn, but when your trade suddenly looks more profitable than ever, and you are on TOP of the WORLD ( i.e. you DOT is on the TOP of the T+0 line hill) it’s usually a good day to get out.

    • #2259

      Anonymous One
      Participant
      @anonymous@lockeinyoursuccess.com
      Points: 2
      Rank: Newbie

      Just to add to what Kevin said. First I agree 100% that there is no standard sequence other than using the same greek management rules to keep your remaining position in your trading rules.

      I usually take a few days to take off my M3. I usually do it over 2-3 days but maybe I should try a bit more patience like Kevin.

      One addition…..that is the opposite of getting out with max loss…..if I get a day where the profit increases significantly over where it has been trending and/or projecting and it is close to my profit target I will take the entire trade off. More times than not the ‘extra’ profit goes away in the next day or so.

    • #2254

      Kevin Lee
      Participant
      @kevinmclee@gmail.com
      Points: 227
      Successful Options Trader of the MonthAPM2
      Rank: Newbie

      There is no standard “good sequence” to exit. It depends on multiple factors such as what is the position delta, is the market move fast or slow, against or in favor, are you in any urgency to exit (eg. already exceeded max loss), etc.. etc..

      For me, I like to take a long process to exit, starting from about DTE 21 down to 14, I’ll be peeling off parts of the position as I adjust the position delta at the same time. In this way, I am in no hurry to take off a large chunk of complex 3 or 4 legged spreads.

    • #2251

      Robert Dobrin
      Participant
      @bobdobrin@yahoo.com
      Points: 821
      APM2 LIVE Attendee30 Day Affirmation ChallengeThe Trading Triangle Maui 2016Ultimate Income Trader Workshop
      Rank: Freshman

      Whether you are exiting or doing a complicated adjustment on an M3 there is no preset sequence to use. Rather you must enter trades that if filled leave a position you could live with overnight if your subsequent orders do not fill. Continue modeling your trades to get acceptable greeks and t+0 line until you complete your exit.

    • #2250

      Chris Simpson
      Participant
      @fastchris@comcast.net
      Points: 2 404
      APM230 Day Affirmation ChallengeTrade Journals
      Rank: Junior

      Upon thinking about your question more and how I usually do it. I like to close the complex spreads down first as they are harder to fill. I would sell a portion of my butterflies with an order that would trigger my second order which would be my long call. If my long call was a 90 delta, I would sell -90 delta worth of butterflies to keep things balanced. Then I would go for any remaining butterflies and that order would trigger my call spreads. Butterflies will be hardest to fill at your desired price and call will be easiest and fastest to sell. These will all be contingent orders.

    • #2249

      Chris Simpson
      Participant
      @fastchris@comcast.net
      Points: 2 404
      APM230 Day Affirmation ChallengeTrade Journals
      Rank: Junior

      I always look at what is hurting me the most. I close my trouble side first then began to close stuff down in a manner that keeps my deltas balanced. You don’t want to turn your delta neutral trade into a directional trade. That can happen in a heartbeat if the market turns on you. So just take off your risk in a balanced manner.

    • #2248

      Kurt K
      Participant
      @fxmankk@gmail.com
      Points: 465
      30 Day Affirmation Challenge
      Rank: Freshman

      I was wondering what’s a good sequence for exiting an M3 that has a call vertical.
      This is the sequence I’m thinking of:
      1. close call vertical
      2. close 1/2 of flys
      3. close protective call
      4. close remaining flys

      Are there better sequences?

      thanks,

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