 Hey everyone, welcome to another video lesson from navigationtrading.com. In this video lesson, I want to show you how to make an adjustment to a short strangle. In this case, we are looking at ticker KRE. We've got a short strangle on and you can see that price has come down and breached our short strike, breached our break even, and that's when we want to start looking to potentially adjust. Now we have a couple choices of how to make this adjustment. We definitely want to roll the untested side, so this is the side. This is the strikes that it's testing or breaching and this would be the untested side. The reason we do this is because if we click on the call and click off of the put, what you can see here is if we zoom in a little bit, this pink line is where we're at in profit on this piece and the green line is the max profit that we can reach at expiration. You can see there's not very much value left in these call options, so there's really no reason to leave it on. What we want to do is we want to roll that call up closer to the current price, collect another credit, and give ourselves more time to be right. If there was a decent amount of time, let's say over 30 days left to expiration in this June cycle, then we would just stay in June and simply roll that call up. We'd like to roll up to about the 30 delta or so is kind of our sweet spot of where we like to mechanically roll up to, but with the fact that where we're at in this cycle, we're in June, we've only got 23 days to expiration. Now, remember, once we get closer to that 21 days to expiration, we're going to be looking to roll out to the next cycle anyway to kind of extend that duration, collect another credit for doing so. In this case, we're going to do both in one roll. We're going to roll down the call, and we're also going to roll the entire spread out to July. What I like to do first is I like to go out to the cycle where we are rolling to, and remember we're going to roll down the call, but we're going to leave the put the same. On the call, we're currently at the 59, but we want to roll down to about the 30 delta. Now, we've got the 28 or the 37, and so I like to go a little bit above if it's kind of in between. We choose the 37, which is the 53 strike. We're going to roll the calls down from 59 to 53. You can see that our put is also at 53, so we're essentially going to roll that down into a straddle. What I like to do is I like to set it up on this first exactly what we're going to do in the cycle that we're going to roll to. We're going to use the 53, and we're going to sell a, well, in this case, we can just sell a straddle. So it's a 53 call, 53 put, and we have done three contracts on this. So just to make it match up, let's move that to three and we'll take this over to the analyze tab, click off our current position just to get a visual of what that's going to look like after we make the roll. So that's what it is. It's a 53 straddle. We've got a little bit more of a buffer, a little bit more room to the upside, which I like. It's made a significant move lower. So if we get a little bit of a bounce or retracement off of this, then that will benefit us implied volatility is still nice and high with the IV percentile at 87 IV rank at 47. And so this looks good. Now, the one thing I do want to point out if we go back to the trade tab is look at the open interest. It is not really that great. Any strike that we trade, we like to really be in the hundreds, but here's why I'm okay doing this. A, the bid ask spreads are decent. They're a little wider than I like as well. But what you'll come to find out is if you go back to the June cycle, I mean, this has in the thousands of the, you know, not the half strikes, but the full dollar strikes, you know, they're in the thousands and that's going to start happening in July as the open interest starts to pour into this cycle. So we won't have any problem getting out. So that's why I don't mind getting into this, even though the open interest looks a little sparse, you can see over on the put side, it's much heavier, but that'll start to fill in as we move through time and get closer to that expiration date. So I don't see that as really much of an issue at this point. So let's go ahead and do that role. So we can essentially do this all in one transaction. So just highlight the position you're rolling, right click, create rolling order, and it's the first one, sell double diagonal. Now, what we'll have to do because it automatically defaults to the exact same strikes into the next weekly cycle. So the reason I set this one up first is so I can reference it just so I don't make any mistakes and I can just view it and copy it exactly like this. So July 19th is the expiration. So we want to change this to July 19th, and then we're selling the 53 call and selling the 53 put. So I just need to make sure that that changed to 53. These top two match up with the order that I had already put in the analyze tab. We're good to go there. We're going to get a credit for this role. So let's come right off midpoint, see if we can get filled pretty quickly, hit confirm and send and give it a couple of seconds. Then we sure did. In fact, we put it at 131. We got price improved up to 143. So that can happen sometime, especially when markets are moving, prices moving around, we can now delete our theoretical position. And we have rolled this out from June to July and adjusted our calls down from 59 to 53. So we're now in the short straddle at the 53 strike in July. That's what we wanted. And so we've completed the role. I hope that was helpful. If you have any questions, let us know. If you want to check out everything that we're doing, just check us out at navigationtrading.com.