dagnyt
Registered: Nov 2003
Posts: 1773 |
11-07-09 02:18 PM
Quote from setu:
I bought a stock at 500 & bought 500 Put for 5.0 & sold 600 Call at 2.0
Now the stock has gone to 800 and I want to catch more profit than initial 100.0
Is there a strategy to do this without liquidating the whole position besides buying back 600 call ?
Thank You.
Here is a suggestion that you will find very useful.
Don't trade the collar next time. Instead, trade the position that is exactly equivalent. Sell the put spread.
If you were long the 500 put and short the 600 put, would you be worried about buying back that put and selling another at a higher strike price?
I doubt it.
When you sell the put spread, you learn to appreciate it when the stock rallies and you make the maximum profit available from your spread.
Your desire to make more than the maximum allowed by the strategy you chose is not a good thing. It will hinder your ability to think straight.
Mark
http://blog.mdwoptions.com
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