So I can cash out in both directions. I can’t predict price.
Right now I’m just in a less than optimal place in that I’m still in the short position while the long position is in the money. I should’ve closed the short position when I was up around $5,000, but I ended up moving and being away from my computer for a few days while we had a rally. lol.
Mentally, I’m not treating it as a directional bet. I’m treating it as two separate things.
Also, I don’t usually enter both positions at the same time, which would make adjusting position size more logical (eg. instead of going long 2 and short 1, just go long 1).
I understand your point, however.
And since I can’t predict direction I have no way of knowing where price is going to go, or for how long. The hedge is basically a “bonus,” whether it’s an extra $100 or $5,000. even if I get it wrong and never close out the hedge for a profit (because price is random), I’m still net profitable for the trade.
I get paid more SPY dividend this way, too, because I’m holding larger SPY positions.