IronFist's beginner option trading journal
- Thread starter IronFist
- Start date
No reason to be short the 1.50 Puts. Tiny premium is lost in the spread.
Same loss potential as owning the stock & less profit potential.
Easier to exit the stock & no rolling at expiration.
After purchasing stock, place sell limits @ ___, ___, ___ to scale out. Price just needs to pass through your orders by .01 & you're out. With the short Puts, price needs to close above 1.50 on Apr. 30th. If price goes to 1.60 Apr 20th then closes below 1.50 Apr 30th you're still in.
***Thought you agreed the last time I suggested this.
https://www.elitetrader.com/et/thre...you-change-strike-prices.357242/#post-5352883
I missed your post before until I had rolled.No reason to be short the 1.50 Puts. Tiny premium is lost in the spread.
Same loss potential as owning the stock & less profit potential.
Easier to exit the stock & no rolling at expiration.
After purchasing stock, place sell limits @ ___, ___, ___ to scale out. Price just needs to pass through your orders by .01 & you're out. With the short Puts, price needs to close above 1.50 on Apr. 30th. If price goes to 1.60 Apr 20th then closes below 1.50 Apr 30th you're still in.
***Thought you agreed the last time I suggested this.
https://www.elitetrader.com/et/thre...you-change-strike-prices.357242/#post-5352883
So should I let them expire and take assignment?
Yes, let them expire.
After assigned the shares, place limit orders to sell.
I think your break-even is around 1.30 ..... so depends upon what you expect from this trade but you could do sell limits 100@1.25, 100@1.30, 100@1.35, 100@1.40.
This will get you out of this trade much easier than trying to get the options to expire worthless.
Stocks in the single digits are difficult to sell puts or roll out. Too much distance (%) between the strike prices.
These options are so annoying.
April 23 1.50 options, ask is .66.
Ok, let's see how far out we have to go to roll them to make money...
April 30 1.50 options, bid is .66 (loss after commission)
May 7 1.50 options, bid is .66 (loss after commission)
May 14 1.5 options, bid is .66 (loss after commission)
May 21 1.5 options, bid is .68
April 23 1.50 options, ask is .66.
Ok, let's see how far out we have to go to roll them to make money...
April 30 1.50 options, bid is .66 (loss after commission)
May 7 1.50 options, bid is .66 (loss after commission)
May 14 1.5 options, bid is .66 (loss after commission)
May 21 1.5 options, bid is .68