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sold put plus bought call
$Palantir (PLTR.US)$ hi guys, if I had sold some puts and bought some calls, should I buy some puts and sell some calls to hedge? as pltr has been going down and the market may go down more, should I buy puts n sell covered call to prevent margin call or just top up cash to maintain the margin calls?
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Strik57 : I myself just adding more cash but my margin isn't alot so I add cash to lower my margin instead of buying more stock.
IAmMooMoo OP Strik57 : oh ok.. do you think if we buy the opposite will maintain the margin without getting margin call?
doctorpot1 : if you do it correctly what you have is known as a box spread. and if your prices are correct you can make it a guaranteed win box spread where regardless of what the price is, you will win a small premium. but is it hard to set it up with human trader as HF are using machines to find such deals
doctorpot1 : I also sold put for PLTR previously so I just roll the PUT as explained in this post :Knowing the right strategies could help turn a bad trade into a good one.
https://www.moomoo.com/community/feed/107452442279942?data_ticket=5b3500b278c1b7aa4a176e85285988a1&futusource=nnq_saved
my position is a cash secured PUT and I'm still holding it. Will just keep rolling down if possible until price recovers.
Celestinel : ready to blow my load all over this Goldnugget
IAmMooMoo OP doctorpot1 : ah.. thanks.. but then now eat into my margin.. need to top up funds.. not sure if I should sell off the options or buy the opposite to stop margin calls..
doctorpot1 IAmMooMoo OP : It is your call on what strategy you would like to use :) just be careful, don't let your risk level hit margin call level. if not moomoo will auto liquidate your position for you.
IAmMooMoo OP doctorpot1 : oh.. haha.. I sold the put and bought the call at TD actually.. but not sure if I should just keep topping up or buy put and sell call to cover.. possible to cover?
doctorpot1 IAmMooMoo OP : and also, this year a bit risky to play with margin cause a lot of factor is going to cause the market to drop hard, like interest rate hike, inflation, new covid, increase jobless claim, etc etc.
doctorpot1 IAmMooMoo OP : The one that is probably affecting your margin is the PUT you sold. It is possible to buy the same put to close your position. Given the price of pltr now, you will close at a loss.
The CALL should not affect your margin cause you paid cash to buy it.
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