Yes , I just bought 1 call for $30 with a 50$ strike
Sell a losing long call?
- Thread starter john7722
- Start date
I think the shares would have been better than a very expensive call.
Thanks for your answers, I am just going to take the risk of making a fool of myself by saying you are quite new to options and did a pure directional bet on the underlying hoping that your directional bet would pay off and you wouldn't need to fork out the full amount for buying the underlying but instead you know about deltas and the effect of the underlying on the option prices via this delta mechanism so you thought I will buy the deep ITM options to gain from my believe that the underlying will increase.
So, now if your premise is that the underlying will increase in price still now (for all what its worth we don't even know if your losses on the options have been an effect of the underlying going down, or you have lost on theta or the Vega taking a hit since you bought those options) point being there are so many ways losing money on a long option than there is to "win".
So unless you don't grasp those aspects and you are anyway making directional bets, then take your losses for now, and go buy the underlying if you still believe in it going up, at least in that scenario you would not have to deal with the underlying going up but the market lowering the ImpVol and putting your option position in larger losses all the way to expiry and locking your capital just to hand you merely intrinsic value and no time value.
Or take the advice of some other posters here by turning it into a spread and have the market pay for some of your paid premiums but also share your profits with the market above the short strike
... Whatever you do don't pay a hack, guru, mentor hard earned monies to teach you something you can pick up about options by online search or in a good book about the topic, for the technical concepts and trading I recommend Sheldon Nathanberg, if you are theoretical and mathematical and inclined towards that, then let me know and I can share a few of those references as well 
. Happy trading and stay safe when out and about in the markets!
When life gives you lemons, make lemonade.
You are 100% right about my reasoning for buying that option .
Thanks for you advice.
I have Nathanberg's book but it is a rather difficult for me. I started couple of times and gave up.
I think I have to start again . I read 1 or 2 books about options, which basically explained some basic strategies ,but didn't teach you much about adjusting position and greeks and volatility or how to practically use options and what to look for when buying options.
Could you recommend some other books , resources or youtube channels?
Not to be rude, but if you can't get through Natenberg you probably shouldn't be trading derivatives yet. Try again.
I agree,but at this point I don't really trade options. I just buy a call when I'm bullish ( from time to time) instead of buying shares or sell a put when I am trying to get an assignment at cheaper price.
- Any book on options is useless in this situation.
- The LMND option trade is purely directional.
- Price target for LMND is $80.00+ by December 17, 2021.
Sell weekly (if there is one) $50 to collect little it premium, it is called calendar spread. It may not break even if the stock doesn’t come back but it will lower your costs.
- LMND is doing good.
- The bid on your calls is about $28.00
- If this keeps up you should make a nice profit.