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

Hey everyone, Kirk here again from Option Alpha and welcome back to the daily call. Today, we are going to answer the question – “Can we roll inverted strangles from one month to the next?” The simple answer to this question is – Yes. Of course, you can roll your inverted strangles from one month to the next or one expiration period to the next. The question now is going to become – “Can you roll them for a credit?” Meaning you don't want to pay to roll the position. Here's how I would generally set it up and just walking through how I would think about it as we roll positions. We’ve done this before in the past, so it’s not something that we haven’t done. We’ve done it a bunch of times and it generally works out pretty well when you extend your trade and give yourself more time. Let’s say we have a position. For whatever reason, we got inverted on the position, meaning our calls are below our put strikes. We go inverted. Let’s say we’re inverted by $2, so a very small inversion. Sometimes we can get inverted