Share Price under Option (Put) Price

Discussion in 'Options' started by Andiroo, Jan 30, 2013.

  1. Andiroo



    What is the best strategy as the share price on my underlying company holding approaches my once deep out of the money Put Strike with a few months still until expiry?

  2. Given the stock and strike you selected, I also have concerns.
    I'm a little surprised you selected that particular stock and strike.
    I'll get back to you once I've completed my analysis of the stock. But given where it's trading, I too am concerned.
    Should we also assume it was a naked put???
  3. Andiroo


    HLF, May 30 Put
  4. Are you long or short?
  5. my bet.. he's short.. if he was long.. he probably wouldn't be askign questions..
  6. Andiroo


  7. Follow your trading rules that you set before you put the trade on...
  8. metameta


    roll out and down the premiums are juiced even down into low 20's or even teens they are high priced down there because people are pricing in zero price potential, vols are 70% plus down low.

    shorting the underlying carries more risk than closing the position at a loss right now imo. you pay dividend, 3% to short (currently) plus who knows if they get cleared and go private.
  9. a strategy is to roll and increase the position risk by a factor.. that name is a gamble..
  10. metameta


    you can roll down and out for a debit (loss) you don't have to double up this isn't pg or mcd in which case i would double up.

    unless op thinks its headed to zero like ackman what is the harm in rolling?

    i'm just illustrating an option he may not have considered besides closing for loss.

    i closed 70% of my short hlf puts at breakeven early jan after being underwater $12k on them and the rest of the strikes are in the low 20's i'm in the camp that hlf is likely to be worth more than zero.

    good luck.
    #10     Jan 31, 2013