(VRA) bought 1 option call for 3.10 at 20 strike .. Current 17.46 (was 19.78 ATM) expiration November... My mission is to sell when current reaches around 26.. Should I worry about "theta decay" ?? Should I sell some type of spread ?? Or just wait ?
What was your plan in buying a November ATM call with a 60 cent spread? Why didn't you just buy the underlying? The time to think about your next steps is before you place a trade, not after.
Good advice from lindq Apparently you are the sole owner of all contracts at that strike (1)! Looks like you bought one contract on 3/28th. You should not trade products with no liquidity. You should have a plan, so you can learn from your experience (when it appears to work, and when it does not, which may allow the opportunity to improve your plan).
I just started .. I thought buying a November expiration would give it time to go up.. I got news of a flagship store in NYC w/ some supporters who bought stock.. And secondly I figured buying a 20 strike @3.10 when the current was 19.78 that I would break even at 23.10 and I predict 27 and I would lock in profits then ... (I'm aNewbie.. Was that wrong ??
Mission Accomplished ......... You placed an option trade based on your opinion on the underlying. If all goes well you make 2x your debit. No ......... Option greeks will have no effect on your trade. If the underlying trades as you expect it to you will be able to exit at $6.00. The underlying trumps all greeks. No ......... You don't want to limit the upside, the meagre premium collected isn't worth it. Perhaps VRA surges past $30.00+. Yes ......... Let the trade have time to play out.
You are starting off fighting a huge spread, which price will need to overcome. Second, for the next few months you'll have a terrible delta, so the stock will need to make a very big move for you to see a profit prior to expiry. Third, if you don't have that move then theta alone will start to move against you as the clock ticks forward. Fourth, as was mentioned there is no interest in the option (you alone) so good luck trying to hit the ask. Fifth, from now until expiration, you will need a big move in the underlying to see the stock move above your strike. But hey, other than that, there is always prayer. And lots of luck.
Thx.. I predict the ask to go between 26-30 before expiration ... But I wasn't aware that there was no interest in that option... And I thought buying a option ATM or ITM was a better play .. Back to the drawing board .. I thought I had my head wrapped around it .. But the screws seem to be loosening up... Any and all ADVICE is welcome.. I'm eager to learn ... If trade falls I use as a learning curve , if profits I'll lock profit .. So no matter the outcome it will be a lesson!