How to Add Gamma Protection to Portofolio That Does Require Alot of Management

[Guest]

Good morning. I have mentioned in the past that the earnings trades do not really work for me because I have a full time job and can't create and monitor the orders during the day.

I have been doing some of the theta based trades on a very small scale such as calendars, long butterflies, diagonals, and ICs. HOWEVER, I don't use much of my portfolio because of the potential for very large losses. On SO, you balance your theta trades with some vega and gamma trades like the earnings straddles/strangles/RICs. Again I can not effectively use these trades for balancing.

Does anyone have any suggestions on a vega/gamma trade that could be opened for a week, weeks, or a month and not so heavily managed, but provide protection in a large market move? Obviously I'd want to minimize theta decay.

Thank you!

[Guest]

Thanks for the response Kim. I know there will always be some sort of risk. I really meant a position that can minimize theta risk, require limited attention, and protect your portfolio with some gamma exposure.

What about some sort of short butterfly? What about a short butterfly that is X days out and that is on the sector that you need coverage in? For example, if you are doing a calendar on Citibank you could do a butterfly on a financial etf, maybe one that is 60 days out or so?

Any thoughts?