Canadian Options Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Canadian Options

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: csm who wrote (1421)	9/14/1999 9:00:00 PM
From: Porter Davis	Read Replies (2) of 1598

>>Options lab Boy, this is a problem we all should have. You're up roughly $15/shr the way I figure it. In my opinion, the first thing you have to do is determine how you feel about the market in general and PD specifically. This should guide your actions--don't try to get fancy just because you can. Here are your possible courses of action as I see them: do nothing, hoping PD stays above $30 until expiry; take the position off by entering a closing spread order (you'll pay some premium, but remove the risk); buy some puts to remove some of the downside risk (say you buy Oct 30 puts); or roll up or up and out. Options 2 and 3 will cost some money out-of-pocket, but lock in some or most of your profit. Rolling raises your profit potential, but leaves the possibility of losing all or most of your paper profits if the market should tank, taking PD with it. Plotting your risk/reward profile on paper would be a good exercise...then see how comfortable you feel with the look of each position. The absolute bible of options trading (although it will initially glaze your eyes over) is 'Options as a Strategic Investment' by Lawrence MacMillan. If it ain't in this book, you don't need to know it. Happy trading. Porter

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next