When it went to 86, I panicked as it was the 52-wk low. And if it falls further and I got assigned early, I didn’t like that. I thought I was buying myself sometimes to think it through
What's wrong with getting assigned ?? As a long term "value" investor,I would think you would love buying stocks at a discount... You think Buffet sell puts to collect premium?? I don't think you fully understand that once your put is ITM,you have all the downside risk and no upside above the short strike.You are effectively short that call.. Had you bought the stock at 104,what would you be doing?? I already know
I just couldn’t stomach forking out ~20K to sit on a stock that might take a while to recover. I still have a few others long positions that are also in the reds. It’s too much to bear, not necessarily rational. Buffet certainly has more money than me to spare !-) But now that I’ve got some pointers from all of you, I just need to keep my conviction that the stock will get better and let the chips fall where they may! I may come back and ask some more options questions to learn first before trading, so thank you in advance for your tolerance of my stupid questions.
Aren't you writing cash secured puts,tying up capital?? Sounds to me like you should have done a 1 lot if being dow 7- 8 percent has you scrambling.. Your big mistake was the roll...
This post is a strategy for being whipped sawed . It assumes that the assigned stock goes back from being a major loss to being profitable. as a covered write. The OP is not a trader
If I was deeper in the money, would you suggest a roll or a roll is never an advisable trade? Or should I ask, when is it appropriate to do a roll?
If the trade is a great trade on its own,I would do it..I don't believe in option repair..It's a myth at best.. The roll you did is short Vega. If you must roll,sell calenders when vol is high,or when there is a significant disparity in implied vol between the shorted dated vs longer dated( longer being higher). I don't quite get your aversion to being put the stock...Odd mentality for a long term investor..
It's simply an opportunity cost issue. Why get put the stock at $91 when I can buy the stock for $86 in the market? Every single dollar counts.
Rookie Mistake.. How and when is he going to get long at 86 by taking in .53 for 35 day rolls?? You aren't suggesting selling cheap(iV) calls as well?? Option repair is a complete bullshit myth... Hes bullish,doesnt know options and if hes dead right hes short the embedded call... Hes a fundamental investor who for some reason rolled at the bottom while learnings Options 101 from the option repair squad