The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again at optionalpha.com and welcome back to the daily call. Today, we are going to be talking about when to take profits versus letting winners run. This topic basically came from a question that somebody submitted. I want to read the question here for you guys, so you guys understand the basis behind it. They said, “Kirk, given the research that you’ve done, I know there's been a change in when to close a position for a profit. The old guidance used to suggest taking straddles and iron butterflies off at 25% of a gain and strangles and iron condors at 50%. Now, I understand that the research shows leaving on particular straddles and iron butterflies a bit longer sometimes in the right direction and I, perhaps and others are interested in learning how you decide to take these positions off at 25% or 50% versus letting them ride a little bit longer and why the research suggest that we hold positions versus take them off. Again, learning through your thought process in these sit