Got an email today from a trader in trouble.
Here’s the situation and what I told her:
Would Allen considering giving me a advice fix for my AAPL and GOOG calls? I have January 19, 2013
AAPL $665 bought for $42.41 now $9.90
GOOG $775 bought for $41.30 now $4.50
I sure would appreciate some advice!!
Before you read my answer, what would you do in this situation? Take a few minutes to come up with a couple strategies.
Here is how I responded:
Thats why i hardly buy options anymore.
if you dont think they are coming back, i would sell.
If you do think they will rally, you can sell current month options against them for the premium.
So on Aapl 665, Nov 630 calls are paying 2.22. Once those expire in 15 days you can sell next months, or even weeklies. But if the stock rallies above your [...]