Advanced · 7 min read

Adjusting a position

Why traders adjust, common adjustments, and the cost of every change.

An adjustment changes an open position, usually because the market moved and the original risk profile no longer fits. The Adjust tab compares possible adjustments side by side before you act.

Common adjustments

• Close a tested leg: exit the leg the market is moving into, accepting its loss.
• Roll: close a leg and open a similar one at a different strike or later expiry.
• Add a hedge: buy a protective option to cap the loss (for example turning a short strangle into an iron condor).
• Reduce size: close part of the position.
• Exit fully: close everything and start fresh later.

Things to check before adjusting

• How does it change the maximum loss and margin?
• What are the extra charges for the new orders?
• Does it fix the problem or only postpone it? Rolling a losing position can increase the amount at risk.
• Is the change consistent with the rules you set before entering?

Caution. Adjustments are not free insurance. Each one adds cost and can add risk. 'Adjusting until it works' is a common way small losses become large ones; decide your limits before you enter.