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

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to be talking about when adjusting too early backfires. In particular, we’ll go over our XBI example. Look. I'm always a fan of being transparent and kind of talking through all of the positions and philosophies and things that we consider to be important here at Option Alpha and one thing that always is something that's difficult to do with a lot of precision I would say is adjustments. Adjustments are a tricky thing. You adjust too early and you potentially find yourself in a situation where the position backfires like what we had in XBI, but you adjust too late and the same market scenario that you thought you should adjust and you didn’t because you maybe got burned before, you end up with a position that lost more money than if you were to adjust it and reduce the risk. Again, it is a fine line. There's no perfect formula for adjusting. Each style of position requires a little bit more massaging