Recompute remaining risk

What is max additional loss from here? For a long option that is already cheap, additional loss is small — the mistake may already be paid. For a short that is in-the-money with high gamma, additional loss can still be huge. Those two situations do not share a playbook.

Pull the live mark, IV, and greeks on the chain. If the feed is partial or mock, do not “manage” off fiction.

Four honest options

Close: pay the spread, reset. Hedge: add delta or a wing to cap the nightmare. Roll: only if the view is still valid at new prices. Convert: e.g. turn a short call into a call spread by buying a further wing — you pay, you cap.

Adding size to “average” a short-vol loser is how accounts disappear. If the original thesis required a range and you are in a trend, the thesis is dead.

Long premium that is losing

Theta and IV crush kill longs even when you are slightly right on direction. Ask: is time still useful? If expiry is tomorrow and you need a miracle, closing may cost less attention than watching. If IV is crushed but you still want the same event next month, that is a roll decision, not a hope decision.

Do not turn a cheap dying call into a larger ATM purchase without sizing it as a brand-new long.

Short premium that is losing

Priority is cap and margin. Buy the wing. Buy delta. Reduce size. Venue liquidation will not wait for your blog post. Portfolio margin can look fine until it does not.

Defined-risk shorts that are already at max-loss territory: closing or leaving to cap is often similar economically after spreads — check both.

Journal the real reason

Wrong direction, wrong vol, wrong expiry, fees, or process (no stop on a short). If you cannot name it, you will repeat it. Account trade-idea logs exist so the research layer can remember; they are not broker tickets.

GEX “support” is not a reason to hold a broken short.

Practice this on OptionsMatch

Rebuild the current structure in /t/btc/strategy, add a wing, see the new max loss. Chain + greeks desks for live context. Then act on the venue.

Not advice to hold or close any position.