Buy LGF via selling Aug 13 puts LGF@14.8
I cancel the order to sell strangles on Lions Gate, and decide to sell puts instead. The thought does enter my mind: will I be burned again? I did a similar cancel then replace and the stock moved lower. I am selling more puts because my delta is moving down as the stock moves up. I am already short Jul 12, Jul 13, Sep 13 puts. I see the 11 to 13 area as support, 16 as resistance.
This is my third trade of the day (earlier I sold puts on ALXN Alexion and BRKB Berkshire). Option traders often have free capital just after expiration. In my case when options that I sell short expire, buying power becomes available, and I am committing some of that capital to selling puts. Managing position size, margin requirements are vital concepts for option sellers.
/edit this post: turns out my fear came to be. I sold puts near the top. I am selling some Jul 15 calls with LGF @14.3 to rebalance my position. It isn't the original idea of selling strangles, but it is close. However, I got mushed by the intraday moves. LGF has been and continues to be a cruel mistress.
Long ALXN, BRKB, EWG
Net long IWM, LGF, SPY
Net short GLD