I have three strangle trades with X as underlying. Two of the trades we already rolled into the next week. Now was the time to roll the last one since the stock continued sliding down.
Here is a trade we had:
-3 X Mar10 37.50 calls
-3 X Mar10 40.50 puts
As the stock continued sliding and expiration was approaching I decided to roll the trade as soon as our calls closed.
First, our 37.50 calls got closed:
BTC 3 X Mar10 37.50 calls @ 0.05 debit
Once we were cleared and had only puts on, I rolled them:
BTC 3 X Mar10 40.50 puts
STO 3 X Mar17 39.50 puts
STO 3 X Mar17 35.50 calls
@ 0.22 credit limit day
For now, the trade is safe again until the next week. And again, the strategy to roll this trade is same as before.
If the stock continues lower, our new calls will end out of the money again, will be closed for 0.05 debit and we will roll our puts down again.
If the stock goes higher, we may still roll our puts lower, or we may start rolling calls higher and keep puts where they are. But this will all depend on the stock price action next week.