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6/18/20: Portfolio Analysis - Closing Out a Fully ITM Butterfly Spread

From Theory To Practice

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

In today’s portfolio analysis, we begin by closing out our losing positions in AMZN and DIA that both expire tomorrow. With these options being fully ITM, we must close these positions before market close tomorrow to avoid automatic assignment. Then, we take a look at our TSLA Butterfly...a position that is also fully ITM. In this strategy, though, the “max loss” is a little less clear, so we unpack it in detail.

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