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r/thetagang
BTC short legs of worthless credit spreads
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User asks about buying to close (BTC) the short leg of a profitable credit spread to lock in gains and avoid late reversals.
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still learning the ropes of credit spreads, but it looks like this is a smart way to 'close' a credit spread that's gone completely in your favor but still has some time before expiry?
you're locking in the win that day, whether its a 30% win and you're satisfied, up to maybe a 99% win?
you're protecting yourself against a late massive swing the other way?
once you btc the short leg, ledger the p/l as (premium - btc) do you do much else besides occasionally checking for a reversal of fortune on the long leg?
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