My amzn & Google naked put sell is In deep red . How to play it on Monday to recover the loss.

[Millionaire_Raj]

It depends how capitalized you are; if you can take some more heat there's a good chance you will see a decent pullback given how bullish this market is long term and can recoup 50% of your losses. Technically, it's not over for you yet but it's a worry because this move south looks to be the start of a decent correction—300 points on the S&P, which is no doubt why you're here asking for help.

...and if you followed the news and economic data, you would've known there was a high probability the manufacturing data was going to be weak. I think I posted a few weeks ago also that this post-Christmas move up will likely see a lot of investors get burned.

Thanks love the trade.
Monday will try to recover loss or will close

 

[Snuskpelle]

It depends how capitalized you are; if you can take some more heat there's a good chance you will see a decent pullback given how bullish this market is long term and can recoup 50% of your losses. Technically, it's not over for you yet but it's a worry because this move south looks to be the start of a decent correction—300 points on the S&P, which is no doubt why you're here asking for help.

...and if you followed the news and economic data, you would've known there was a high probability the manufacturing data was going to be weak. I think I posted a few weeks ago also that this post-Christmas move up will likely see a lot of investors get burned.

Basically this is accurate, when you're over-leveraged you will be forced out at the worst possible time.

NQ is in a strong bullish trend but personally I would think it's over due for a 10% correction. In general I would agree with the posters saying to quit and call it a day on Monday. You don't erase bad decisions by doubling down on them.

 

[formikatrading]

What are the lessons learned here?

Thanks for the response IAS_LLC.
Taking 8k hit is a big loss. Can suggest a way to recover some at-least ?

 

[RedDuke]

MORTGAGE YOUR HOUSE AND OWN THESE STOCKS!

I knew you will say that

 

[Hivey]

Let this be a good lesson to always have a plan what to do when the trade goes against you, before you actually start the trade. If you don't know what to do in these situations, and you are not comfortable taking the loss outright, better not start trading it.

 

[daniel5198]

Any adjustment you try may increase your loss. Just close and take the loss before it grows bigger on you.

 

[IAS_LLC]

"Everyone has a plan, until they get punched in the mouth"

 

[smallfil]

What are the lessons learned here?

When you get into the trade, you assume the worst case scenario. That is the best assumption. If it does not happen then, you lost a little, won a little or won a lot. A far better result than, hoping for the market to bail you out. 9/10 times, the market will move the opposite way you want it because the trend has changed and you are not even paying attention.

 

[ironchef]

Monday will try to recover loss

How are you going to do that? Hope is not a strategy.

I am not trying to give you a hard time. I am new to options, just that I had experienced many similar situations in the past, more than I care to admit, so I am speaking from experience. First question you need to ask is why you executed this trade, second question, is your opinion is still correct? If it is you do A, if not you do B, then come Monday you have a plan.

 

[Trade Theory]

Why would you sell naked puts on tech when the markets clearly in a bubble? Vol is still fairly low so you're not getting paid enough premium to offset the risk. The only time I would sell naked puts is if you are using that to finance other trades. Such as selling GOOG 1000 strike puts to finance purchasing 1500/1450 put spreads, which is a put ladder.

By the time Monday hits, if the markets trending downward it will already be too late. There's a good chance the market will recover next week but watch the /NQ Sunday when the futures market opens to get a read for where you are. If you wanted to protect yourself from further losses you could beta weight your current short puts to the nasdaq and offset your delta by shorting /NQ or /MNQ in the weekend session before the equity market opens. That wont help you make back what you lost, it will only help protect you as if you were adding a leg to your trade spreading off your naked short.