SITUATION
YOU SELL DLTR options march expiration..
the 55 moved from 30 to 70 cents.. u found it reasonable.. u sold 1.
now the damn thing is up to 2.05. u r furious
paper loss 140$
u know this will go down... u can close this and sell 5 calls of 60 for 30 cents.. and recover ur loss.
is this called MARTINGALE strategy..?
so when it goes to 60.. then what do u do?
close those 5 and open 65 , probably 20 of them to recoup the 60 strike loss.
how do u decide . when to do this. .I WOULD SAY, rare..
as it is.. the next strike OPTION is if it is UNLIKELY to be met, the premiums are V low. hence they make u sell more to recoup your earlier LOSSES..
YOU SELL DLTR options march expiration..
the 55 moved from 30 to 70 cents.. u found it reasonable.. u sold 1.
now the damn thing is up to 2.05. u r furious
paper loss 140$
u know this will go down... u can close this and sell 5 calls of 60 for 30 cents.. and recover ur loss.
is this called MARTINGALE strategy..?
so when it goes to 60.. then what do u do?
close those 5 and open 65 , probably 20 of them to recoup the 60 strike loss.
how do u decide . when to do this. .I WOULD SAY, rare..
as it is.. the next strike OPTION is if it is UNLIKELY to be met, the premiums are V low. hence they make u sell more to recoup your earlier LOSSES..
