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Okay. What I like to do every single morning is take a look at each one of my individual positions, and I’ll take a look at the beta-weighted position. First, we’ll start out with IWM. What we have here looks like – we put our calendar on a few days ago. We put a double calendar on. You can tell from the graph what a double calendar looks like.
Right now, we are approaching the bad area. We’re way up here in this corner, very close to our breakeven. Our breakeven is still a little bit more than a point away. It’s in the position where it isn’t looking so good. We may have to come back and look at that, and see if an adjustment is necessary.
We like to keep our positions right around the center position on a double calendar. An adjustment today may be necessary. Let’s take a look at that.
Let’s go through our other positions, and take a look at our SPY. We just adjusted it. It’s looking really good, right here in the center. It looks like we have a nice profit situation going on. We have the extended breakeven points at 131 and 144. I think we’re in pretty good shape. I think that we’re a little short Delta here, but we’re also short Vega, and those cancel each other out. We may be okay on this position. Price-wise, I think we look really good.
Let’s take a look at our EEM. Our EEM double calendar – remember, we didn’t put all these positions up on the same day. That can be a very good thing, because we had a very large up-move when I put on the SPY and the IWM positions. I put the EEM position on after that large move, and we look really good. We’re right in the center of our double calendar tent. That position is looking very good, right now.
Don’t worry about these profit and loss figures, because we just put these positions on. You know, the first few days, the first week, even – sometimes even the first week and a half – you’re not going to see a position in profit, until we get a little closer to expiration.
We put these out 30-35 days from expiration. The Theta doesn’t really start to kick in – you can see that we’re positive Theta here – it really doesn’t start to kick in until about a week, or a week and a half, until you get into a position like this.
Don’t worry about that. Now we’ll take a look at everything on a portfolio-weighted basis. It doesn’t look too bad. On a portfolio-weighted basis, our test account here looks decent. What they do, is they portfolio beta weight this based on EEM prices. If we were to keep everything the way it is right now, the EEM at 145.08 could run all the way up to 152.50. We would still be in a profitable position, if we were close to expiration.
If it runs up there too far before expiration, then we may have to do some additional adjustments. But this is the way we look right now, and it looks pretty good. The EEM could run all the way down to 132, and all the way up to 155. We’re not looking too bad.
I would like to raise the center of this a little bit, but maybe once we adjust our IWM – remember, IWM is kind of the weak link in our portfolio. We’ll just go back here and take a look at IWM again. Let’s take a look at this. This may be the weak point in our portfolio, dragging down the center of our tent.
Right now, we’re right up against that age. What I’ve done, is I’ve taken a couple of possible adjustments here. Let’s take a look at this. What happens if we add a put calendar at 70, which is just about at the center? That does raise our tent at the center, but we are still… It does extend our breakeven point on the upside, by just a little. It’s just below 73. It raises it up about three-quarters of a point.
What if we put another double calendar on, laying it on top of the one we have? Now, we are starting not to look too bad. We’re back, very close to the center. I’m not talking about taking off any of our other positions, here. We’re going to keep these other positions.
What we want to do is, we want to straighten out our tent. If we hide our simulations, we’re way down here. If we do some adjustments, then we have a nice little tent here. We have wider breakevens. Now our breakeven on the upside is all the way up to 75.5. On the downside, it’s 68. This may not be a bad adjustment for this position.
That’s how we roll through each one of the positions that you have, on a daily basis. You just want to make sure that your position overall, on a portfolio basis, is looking really good. On the individual symbols, let’s take a look at this, on a portfolio-weighted basis. What happens to our position?
That’s without the adjustments. That’s the way it looks, on a portfolio basis. I would like to raise this tent up here, just a little bit. Flatten this out, maybe. If we put on the adjustments that we planned for IWM, what does that do?
It raises it up just a little bit, but it also extends the tent up to the upside here, around 73.74, which would be very nice. We’re going to go ahead and do that adjustment. It’s going to make our individual position look a lot better. We’re in the center. If we take those off, you can see that we’re way down here.
We’re also going to take a look at our portfolio, and it does help our portfolio. Let’s take a look and see what it does. We have this drooping shoulder. We don’t want drooping shoulders. We want really nice… Lift that shoulder up and walk tall.
That’s how you go through your positions on a daily basis, just to take a look and see which ones actually need adjustments or not. If they don’t need adjustments, you leave them alone, and you let the Theta work for you. If you do need to adjust your positions, then that’s what you have to do.
Go through some of the adjustments that we have done, for the SPY. Check the video on the IWM, that we have right here. We are going to be doing an adjustment on it.