How Would You Manage this Position on GS?

A few weeks ago, I bought the Jan 125/130 GS Call spread… it is well into the money, but I felt Friday’s run up was a bit premature, so I put on a mean reversion leg on the position, by buying the 135/130 put spread (hence it is now a butterfly Jan 125/130/135). Upon putting it on, since I legged into it, and had a decent profit on the call spread, the Max Loss I have on now is: +.50 (if it expires above either 135 or below 125, I’m still net positive, thus trade is now riskless). How would you work this position, given that GS will have earnings on Jan 16th, two days before expiry? The delta/gamma is low, so any movement this week between the wings of the butterfly will not make substantial gains. Next week, the short vega will start paying. The Put Spread is currently slightly above breakeven, but I don’t want to lose my hedge just yet. Also, if I feel that GS will be predominantly bullish the day before/after earnings, I want to hold my Call Spread more adamantly then the Put Spread. The Call Spread is 2 points past the max gain level already also. Do I look at this butterfly as two spreads individually and manage it that way? Or, do I focus on the probability of trying to take Both Legs off at the same time near the sweet spot of 130? And that’s before or after the Earnings release and the volatility that may ensue? If before earnings, it’s leaning or past one Wing, then I should trade separate legs accordingly? If it’s not, then trade them together for the sweet spot(body)?

m2c - you’ve locked an arb, if held to expiry your fly has positive expectation, any subsequent trade has no edge. I’d leave it alone and express any further view on GS with a brand new separate trade.

Nice work:)

That makes sense. I’ll leave the fly alone until a few days before expiry. Meantime, I’ll trade around it. Thanks Poulin.

Your ONLY exit point should be if X hits 130.

My nigga.

^Yeeeahhhhh boooyeeeeeeeeeeeeeeeeeee!