Yesterday, Katie and Bat saw some large moves in many of her more neutral positions, and for this, she has mechanically rolled the untested side of her strangles. Today is no different. In XOP, there are two options to adjust her Inverted strangle: continue to roll down the call, or roll into the next month. Ideally, the duo wants to roll the entire trade into next month, but they are awaiting a rally in the underlying. There are similar mechanics at play in X, however, rather than rolling for duration, the team looks to simply roll down the Call and stay in OCT. Last but not least, volatility is still high in /CL, and while the team isn’t looking to manage their tested Strangles just yet (they’re waiting until the tested side reaches a 30 delta), Tony urges Katie to take a look at the richness and sell more premium in a similar underlying, such as USO.
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