Position Adjustment
A position adjustment changes an existing options position in response to changes in the market, risk or trade thesis. An adjustment may involve: closing a leg, adding a leg, rolling, reducing size, adding a hedge, or restructuring the position.
Why it matters to you
An adjustment should have a clear purpose. Examples: reduce Delta, reduce risk, extend time, take profit, protect against a particular scenario. Adding more contracts simply because a position is losing is not automatically risk management.