The classic strategy for Strangle Defense is to roll the untested side, when one side is tested. Doing this allows us to collect more credits, reduce our risk, and widen our break-even points. Naturally though, when you go to actually move that untested side, it can be a little unclear as to how to complete the roll. Specifically, which strike do you choose?
Today, we see with our TWTR position that a great reference point is to reduce your overall directional exposure on the position by up to 50%.
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