Market Measures

Monday – Friday | 9:00 – 9:20a CT

Legging?

Market Measures

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

Does legging in and out of a trade make for better performance compared to simply managing the position as a whole?

Study:
  • SPY, 1 SD Strangle

  • 2005 - 2017, 45 DTE

  • Compare managing winners at 50%:

    • Whole position
    • Each leg separately (16 delta call and put)

We find that managing the position whole as opposed to legging out, yields slightly better P/L. However, legging in and out generates more unnecessary commissions and requires a higher attention level than managing the strangle as a whole.

Market Measures More installments

See All »

Latest tastytrade Videos As of October 19

Most Shared From the last 30 days