Good Morning wxytrader, You must be a really a good trader. This mean you never take a loss on a trade. You must have a few million dollars in your account. Congrats to you.
I understand @wxytrader very well: he simply means to keep the option till the expiry, the very normal nature of an options trade, BECAUSE all risk calculations before placing the order are normally and usually done for the expiration date itself... And the reason is this: only a simple calculation is required for finding the outcome of the trade for any possible stock price at expiry. This is not the case for any days before the expiry: then one needs to apply higher maths using Black-Scholes etc.
Hello Quanto, Just so I understand, if @wxytrader still holding the trade until expiry and was PnL was negative, he lose on the trade correct? Thank you,
(2008) Lambo I was only risking $5400 in the trade...well technically that's the maximum risk... statistically risking 1SD and that's only if you close the position.