USA | Joe R - 11/27/2022 08:24
What part of getting a margin call is wrong if you have sold puts and the market goes down?
You can roll HTAs to capture carry if there is any. But any way you slice it, if price is moving against a sold put…..you will be adding margin money. That needs to be taken off your HTA price.
Like another poster said. They are 2 completely separate transactions. The HTA and the sold puts
Sounds like you still don't understand.
Here is a simple example.
$9 Sep wheat HTA, Sell $8 Sep puts for 20 cents.
20 cent Premium added to HTA = $9.20 HTA. $8 put expires in the money. $8 Sep Put now becomes $8 long Sep Futures.
If @ expiration of put Sep Wheat is $6. would be long $8 Sep futures- put premium of $2= $6 Sep futures. $9.20$ HTA is no worth $6 also. $9.20 - $6 = $3.20- $2 Put premium = $1.20
The short Sep $9.20 HTA is bought back by the Sep $8 long = $1.20. $1.20 would be added to whatever price wheat is sold at, when wheat is deliverd. |
Ways to improve selling price in a down -sideways market.
