Lesson 14 of 17Advanced10 min
How does adjusting crypto options work when Bitcoin moves against you?
When Bitcoin walks toward a strike you sold, there are three common adjustments. Buy a hedge further out to cap that side. Roll the strike away by buying it back and selling a further one. Or exit that side and keep the rest. Doing nothing is also a choice, and it carries the most risk.
Real Delta Exchange quotes · 8 Nov, 2:09 pm ISTFree, no account needed
Step 1 of 4
The problem
You sold a strangle on Monday. By Wednesday the price has walked up towards the call you sold. The position is losing and the danger is only on one side.
Doing nothing is a choice too. Look where the number goes if the price keeps going.
Profit or loss if the price is 78,964(your target)
| Date | Profit / loss |
|---|---|
| On target dateFri, 13 Nov | ₹0profit |
| On expiry dateFri, 13 Nov | ₹0profit |
Move over the graph to read any price; tap or click to set it as the target.
- The 74,500 put is worth nothing at 78,964 (the price is not below the strike).
- The 77,500 call is worth 1,464 per BTC (78,964 − 77,500).
- Together the options are worth −₹1,244 to you on 0.01 BTC.
- You received ₹1,244 when you opened the trade.
- Result: ₹0.
Step 2 of 4
Choice 1: buy a hedge
Buy the call two strikes above your sold call. The call side now has a floor. The put side is untouched.
Costs some income. Keeps the trade alive. This is what the engine's Buy hedge rule does automatically.
Price at 80,483 → the trade sits at −₹1,291
Buy a hedge → the upside loss is capped (+₹26 here)
At 80,483: −₹1,291 no adjustment · +₹26 buy a hedge. Buy a hedge is ₹1,318 better at this price.
Step 3 of 4
Choice 2: roll the call away
Buy back the threatened call and sell a new one three strikes higher. The danger moves up and you keep collecting premium.
You book a loss today on the buy-back. The risk is still open-ended above the new strike. Works when the move is nearly done.
Price at 80,483 → the trade sits at −₹1,291
Roll away → −₹323 here, ₹968 better
At 80,483: −₹1,291 no adjustment · −₹323 roll away. Roll away is ₹968 better at this price.
Step 4 of 4
Choice 3: exit the call
Buy back the call and keep only the sold put. The upside risk is gone completely. Now you only need the price to stay above the put.
Simplest of the three. Least income, least worry.
Price at 80,483 → the trade sits at −₹1,291
Exit the call → the upside loss is capped (+₹655 here)
At 80,483: −₹1,291 no adjustment · +₹655 exit the call. Exit the call is ₹1,946 better at this price.
Which choice removes the upside risk completely?
Answer the quick check to finish. Your progress stays in this browser.
Next: Managing the trade: stop, target, trailingKey terms
- Adjustment
- A planned change to an open position when the market moves.
- Roll
- Close a strike and open a further one in its place.
- Hedge
- A bought option that caps a loss.
- Exit a leg
- Close only the threatened side of a position.
Questions people ask
When should you adjust an options trade?
Before the loss gets large: typically when the price comes within a strike or two of a sold strike, or when one leg loses a set amount. Decide the rule before the trade.
Which adjustment is best?
It depends on the move. A hedge keeps the trade alive if the move continues. A roll keeps collecting premium if the move is nearly done. Exiting is simplest and removes the risk.
Can adjustments run automatically at night?
Yes. Algoclear runs adjustment rules for you around the clock: five triggers, such as Bitcoin nearing a sold strike, and six actions, such as buying a hedge or rolling away.
Keep going
- Next · lesson 15Managing the trade: stop, target, trailing
- GlossaryWhat is a Bitcoin short strangle?Short strangle
- Lesson 11 · 8 minHow does hedging crypto options work on a sold Bitcoin option?Hedging: cap the risk on one side
- Use it in Algoclear28 adjustmentsBuy a hedge or shift the leg before it hurts.
Why adjustments exist
Short options earn slowly and lose quickly. An adjustment is a planned response that limits the damage without closing the whole trade, so one bad move does not wipe out many good weeks.
Crypto moves while you sleep
Bitcoin's biggest moves often come at night in India or over a weekend. A rule written in advance, and an engine that watches every second, means the adjustment happens on time even when you are not at the screen.
The cost of each choice
A hedge costs premium. A roll books a loss on the buy-back and leaves open-ended risk above the new strike. An exit gives up that side's remaining income. No adjustment is free; the right one fits the move.
Written by the Algoclear team · Updated 22 September 2026 · Examples use Bitcoin options on Delta Exchange India.
Practise it on real prices.
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Start freeOptions trading carries risk, and you can lose money. Algoclear is a trading tool, not investment advice.