I have lots of position in biotech, all are in deep loss. Since the index is at all time high point, I am afraid if index goes downside, biotech or other growth stock will go down even further with it, even though they are in bear trend when the index is at ath. I am still not decided if I should cut loss or sell covered call to pocket the fat premium of biotech stocks.any idea?
based on the limited info you have given, this is how to fight the fire : - spray CO2 on the fire ( cut loss) - pour gasoline on the fire so the fire continues to burn so as to have even more sleepless nights. after you have close your position, have a clear mind. Then decide what to do with your trading career
If the trade goes against you. If you sell the calls and the stocks drop. If you sell the stock and it drops. I always ask myself how much can I lose on any trade. Limit your losses.
Not sure, but you better have a plan if you sell calls. What happens if your stock suddenly shoots up? Are you willing to have it called away (sold) at a large loss? If not, will you buy your call back at a loss and/or roll it out further?
Your remark is fallacious.It is called the sunken cost fallacy or in the vernacular throwing good money after bad instead of cutting your losses. The market doesn't care about your position.