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  • 3 Legged Box question

    October 5, 2009 by  
    Filed under Options, Three legged box

    Q: I have a 3 leg box trade on SRS. Since the market has turned do you take the bearish leg off and let the call side run or leave the trade intact.
    I bought Dece so I can let it go for a while.

    A: I keep it on until the option I sold as part of the vertical spread is near worthless then I buy it back.

    I also like to convert the 3 legs into a ‘box’
    to lock in my profits when the market is about to turn against me and I have a good profit. But that requires some skill in determining short-term market direction. My MarketDNA software can help with that.