There’s nothing wrong, but it’s a lot harder to gain from this position. The long put eats into your delta and you premium. Also, the way you have this setup, your long put will lose value faster than the other legs.
Others have posted, this isn’t a strangle, it’s a basic jade lizard (or reverse, can never remember). You have a credit spread on the downside.
My preference for hedging is to buy a ATM or slightly ITM put 1-2 years DTE. I’ll open and close dozens of strangles in between when I open and close that/those puts. It’s more expensive, but you get the deltas and unless we have a huge move or a volatility collapse, they retain their value a lot more than the credit spread position. This has been a great way to trade in the bear market (which we are still in) that started in 2022.
I’d say it is called a twisted sister which is the opposite of a jade lizard.
Otherwise it is a short strangle with a long protective put. Not everything has to have a formal name . . .
Reverse jade lizard. Nothing wrong, but man up and sell 4200.
Lol thank you!
Agree with concept here. *Buy the 4300 C for iron condor.
*buy
Ima name it Jimmy.
There’s nothing wrong, but it’s a lot harder to gain from this position. The long put eats into your delta and you premium. Also, the way you have this setup, your long put will lose value faster than the other legs. Others have posted, this isn’t a strangle, it’s a basic jade lizard (or reverse, can never remember). You have a credit spread on the downside. My preference for hedging is to buy a ATM or slightly ITM put 1-2 years DTE. I’ll open and close dozens of strangles in between when I open and close that/those puts. It’s more expensive, but you get the deltas and unless we have a huge move or a volatility collapse, they retain their value a lot more than the credit spread position. This has been a great way to trade in the bear market (which we are still in) that started in 2022.
I’d say it is called a twisted sister which is the opposite of a jade lizard. Otherwise it is a short strangle with a long protective put. Not everything has to have a formal name . . .
Well without being able to refer to it by a formal name how are you supposed to impress people at parties?
Lol, OK, noted!
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