Dude, just get out of the thing. Don't turn it into a covered call. You have already made a big mistake, get out, wait a few days, and then start working out why you made such a colossal mistake. It won't feel as bad once you are out of the trade.
This statement bothers me a LOT. I've traded options a long time and what I have learned from even more experienced traders is that we want "tight" spreads and highly liquid instruments. If you earned so little then it was never worth the risk to begin with. You have received some good advise on this thread and it would behoove you to take it...however most of us prefer to learn the hard way. Simply because it has wide spreads and obviously not very liquid I'm with the GTF out of it now crowd.
If you had used a Limit Order instead of a Market Order then your position would be at a profit, in the future always use Limit Orders. Just ask actionzip54 for more details.
Doesnt work all the time. Nobody will fill your limit order if you place the price right in the middle of the spread where it is probably 'of value' given where a stock is trading at the time. Most of the time you take the ask or bid price or nothing fills.
I was never day trading the options. I sold a put at a time and price I would have been perfectly happy just going long the stock but decided to just sell premium OTM for a little profit. Wasnt aggressive about the trade. So good didnt go long cause it tanked for stupid reasons and my put is still in the money also. Regardless I think it goes back up soon. For example, I sold another put earlier for AAPL. It dropped a few days ago and now its ITM too. Im not crying about it either. I'll take the stock, or I might roll this. This one has tigher bid ask spreads.
get out if you have not already, it appears you may be in denial about a position gone bad and are trying to find ways to cope.
I trade some OPM in buy-writes and am constrained to stay in the equity position for tax mitigation. This often leads from a short put -> share buy through assignment -> bull synthetic straddle -> synthetic fly; or I'll often maintain the overwrite. There is nothing wrong with remaining married to the position if you remain neutral to bullish on the shares. Where it fails is when you attempt to rationalize it from a position of loss-avoidance.
Yeah, options is like the racetrack. If the horse loses you really don't rip up the ticket, you just bet it the next time it runs.
No definitely not about loss avoidance here. Maybe that was the misunderstanding or impression others saw. I just want to get my time premium from selling the original put. I was happy to take the stock at the price it was trading at when I sold the OTM put. So much higher price. So certainly Im ok with taking the stock now, even as my strike has gone ITM. However, like i said also, the spreads make it impossible to capture much of the time premium I already earned by rolling to a later date in the traditional sense of buying the put back and selling a later dated one. I think the only way is to have it assigned to me so that put contract goes out as zero. However, since my motivation is to keep borrowing costs low, I actually want to keep the stock in the form of a short put which uses less capital and I believe is one advantage of being short put instead of long stock. So I think I will just short on friday. On friday also sell the same put. And by saturday stock will be assigned to me to cover the short, and then I continue to ride the stock in the form of a later dated short put.