We will make a special note of today mornings 100 OTM value... which was 165;
On any given day we will consider the pair cost of the 100 OTM fair if it is as below
165-(no. of days*3%);
meaning, we want a correction of 3% each day. This will give us more confidence in the trade and accordingly we can fine tune the position size.
If the price is drastically off, like it was last week, then we have a reason to be very cautious and not plan to hold the trade for too long.
Lets apply it for a few days and see how it guides us.
Could one of you guys volunteer to keep tab of this formula each day?