Buying Option Calls and Puts to Lower Delta

Option Calls and Puts

Great question from a member:

Last time with MCD position you opened another Butterfly to bring the Delta Neutral. Which I have been following and I thought it is very interesting. And maybe that’s the reason to raise me this question.
So my question is related to Iron Condor. Why do usually we close the

position and open a new one when the price comes after us, instead

of adding some positions to bring the Delta Neutral.
For example: our last RUT we closed 640/650 and opened 660/670.

If we had keep 640/650 and add something to bring the Delta low levels

again would have similar effect??
I know since we are just handling low quantity is more difficult to create this kind of scenario, but assuming that the quantity would be greater, do you think that the mechanism of adding positions to bring the Delta low has the same effect as to roll up/down the position?
Just trying to get a better understand from the options world.

Tks a lot,


Buying Option Calls and Puts

Excellent question.

You are right, the same adjustment can be used in a condor. You can add options to lower the delta. That is one of the adjustments I look at. And it can work. But it depends on what is going on in the market. This month, the market was advancing regularly. Just about everyday it was going up. Adding some calls would only protect the deltas for a couple days and we would then have to do something else. That is why I moved the calls. It is a more drastic adjustment but I thought it was warranted in this environment. if you have a condor where the market makes a huge move upwards in a day and it might go back down, that is when you can add some calls to lower your deltas. Or if there is fear of a big move you can lower your deltas before the move so that no matter what happens you do not get hurt. You can then remove the bought options after the fear has passed.


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