Switching from "In the money" to "Out of the money" option?

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oem7110
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Switching from "In the money" to "Out of the money" option?

Post by oem7110 » Wed Jan 20, 2016 6:32 am

If current stock price is $90 and I long CALL at strike price $100 for 10 contracts, when stock price goes up to $102, I want to switch strike price from $100 to $110 by exiting CALL@100 for 10 contracts and long CALL@110, but I get no idea on how many contacts I should long CALL@$110, should I long 10 contacts CALL@110? because I exit 10 contact CALL@100.

Does anyone have any suggestions on how to determine the number of contact CALL@110?
Thanks in advance for any suggestions

sluggo
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Re: Switching from "In the money" to "Out of the money" option?

Post by sluggo » Wed Jan 20, 2016 9:50 am

Think up five or six different possibilities, code them up, and try them on historical data in backtesting. Choose the two whose backtest results please you most, and trade half of your capital using method1, half of your capital using method2.

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