Last post on Motors Liquidation Co (MTLQQ.PK) trading.
Since the stock fell so fast, hedging by keeping the puts had made sense as of now. Unfortunately, I tossed them and not boxed them.
Second, the futures which converged, also collapsed and could have been covered at low prices; something whích I didn´t bother about.
And third, the most expensive lesson I learned was in regard to options trading.
From IBC where I saw it first, was that options trading is phased out for bk´d stock a few days after the filing. No new options position, just position changes by covering existing ones. The easist way was to open calendar spreads in adjacent months for puts, and calls, as they were trading flat anyways.
So,... this means whatever one has in positions should not be closed but boxed even if it costs trading fees. A boxed position can be opened as needed and melt down at a profit. A closed position (in that regard, calls) can not be opened again thus ending profitable trading; the same was for my sizable put position which I could have boxed and not sold.
Small problem. With trading options, it is possible to readjust positions as needed. With boxes, one has one "one shot" which must fit. |
