Should I sell covered call or cut loss?

[trend2009]

I have lots of position in biotech, all are in deep loss. Since the index is at all time high point, I am afraid if index goes downside, biotech or other growth stock will go down even further with it, even though they are in bear trend when the index is at ath. I am still not decided if I should cut loss or sell covered call to pocket the fat premium of biotech stocks.any idea?

 

[deaddog]

Where do you stand to lose the most money?

 

[trend2009]

Where do you stand to lose the most money?

what do u mean?

 

[maxinger]

I have lots of position in biotech, all are in deep loss. Since the index is at all time high point, I am afraid if index goes downside, biotech or other growth stock will go down even further with it, even though they are in bear trend when the index is at ath. I am still not decided if I should cut loss or sell covered call to pocket the fat premium of biotech stocks.any idea?

based on the limited info you have given,
this is how to fight the fire :
- spray CO2 on the fire ( cut loss)
- pour gasoline on the fire so the fire continues to burn
so as to have even more sleepless nights.

after you have close your position, have a clear mind.
Then decide what to do with your trading career

 

[deaddog]

what do u mean?

If the trade goes against you.
If you sell the calls and the stocks drop.
If you sell the stock and it drops.

I always ask myself how much can I lose on any trade. Limit your losses.

 

[MKTrader]

I have lots of position in biotech, all are in deep loss. Since the index is at all time high point, I am afraid if index goes downside, biotech or other growth stock will go down even further with it, even though they are in bear trend when the index is at ath. I am still not decided if I should cut loss or sell covered call to pocket the fat premium of biotech stocks.any idea?

Not sure, but you better have a plan if you sell calls. What happens if your stock suddenly shoots up? Are you willing to have it called away (sold) at a large loss? If not, will you buy your call back at a loss and/or roll it out further?

 

[Nobert]

Depends on what you're holding & how deep in the red are those.

 

[zdreg]

Depends on what you're holding & how deep in the red are those.

Your remark is fallacious.It is called the sunken cost fallacy or in the vernacular throwing good money after bad instead of cutting your losses. The market doesn't care about your position.

 

[Scataphagos]

"1st Rule of Holes"... when you find yourself in one, stop digging.

 

[Nobert]

Your remark is fallacious.It is called the sunken cost fallacy or in the vernacular throwing good money after bad instead of cutting your losses. The market doesn't care about your position.

That might be true in intra day, but not swings.