Relatively new to options but have had some early success with them, maybe beginners luck. Anyway here is my scenario looking for some advice.
Monday bought MRK jul 27.50 calls for 10c, they shot up to 35c yesterday- whats the best plan of action
a. just sell now take the quick profit
b. buy the july 24 put for 15c to play the swing if it goes back down
c. hold tight- be a pig a little longer
The BEST plan of action is to stop buying chap, out of the money options.
The second best plan is to stop buying out of the money options, period.
The third best plan is to understand how options work and what they can do for your investment portfolio. And the best time to do that is now - before you continue gambling - because that's what you are doing.
To answer your question: Buying the put is the worst possible choice - and that's not predicting anything. But what will happen is you will own calls and puts and watch them disappear into oblivion.