Hi Just wondering if any of the more experienced people here might lend a hand and recommend some additional trades I might make so as to repair or minimize losses for these which are losing now. Original trades are: TBT - Total 6 PUTS - Current stock P is $15.84 ------------------------------------------------- Bought 4 Jul12 $14 PUTS at 0.52 Bought 2 Jul12 $15 PUTS at 0.95 BBVA - Total 6 PUTS - Current stock P is $7.07 ------------------------------------------------- Bought 2 Jul12 $6 PUTS at 0.75 Bought 1 Jul12 $5 PUT at 0.35 Bought 3 Jul12 $6 PUTS at 0.80 * Appreciate any suggestions. Thanks
Well, where do you feel price will go within expiration? If you feel it will settle OTM then just exit the position now before time decay eats away everything.
When you got a losing position and you dont know what do with it, I think best course of action is to simply close it as you are displaying lack of preparation.
Thanks replies so far. I could close the BBVA position but I'd already lose its maximum so might as well wait and see. TBT also almost at maximum loss now. Was hoping someone could suggest some creative way (additional vertical, calendar legs or something) tht could minimize loses.
you didn't say whether your account is approved for spreads etc. So how can anyone really help you when you don't state all relevant information. However if you are approved then sell a higher strike and at least minimize your open loss, if it does not sell-off/retrace. Essentially you are creating a put backspread such that if stock plummets you have limited loss with "unlimited" profits. Did either of these gap up?
Thanks iceman. Yes I am approved for all trades in options except futures options. The trades were put on fundamentals criteria (Spanish bank was supposed to tank but didn't and TBT also same story). When you say sell higher strike, are we talking selling a higher strike put or call?
Simple solution: Buy TBT Aug 2012 15.000 put @ $0.45 (or the $16.00 put). http://finance.yahoo.com/q?s=TBT120818P00015000 Forget BBVA, stock price is too low.
Saying the bank was suppose to tank is NOT an example of investing based on "fundamental criteria". That is investing based on STORY criteria. If i recall someone talking about rolling into another strike, I will simply say I'm NOT a fan of rolling. Rolling is simply a fancy way of saying get out of the stock that's going against you, and then get right back into it. Before getting right back into the same stock that is doing the opposite of what you'd hoped for, based on a STORY,... first look around at another stock, and determine is you can earn a similar credit (or better), with the same remaining cash, in the same unit of time.
figure it out - I gave you all you need to do that. If you can't then just trade stocks. You didn't say whether the underlying gapped higher.
Yes both gapped up. I am analyzing a put backspread as well as that added to buying a higher call. If the risk and max loss improves then I might try this, thanks.