PAL, you mentioned buying back half your calls, then selling more further up (the April 160's, I believe) rather than out (to Mays or beyond). This only partially repairs the situation, no? Or are you willing to have half your shares called out?
Hi Poet:
in hindsight, everyone makes mistakes: big and small. the idea is to contain the damage and not be greedy trying to profit from that situation. The last one leads to throwing good money after bad.
Right now the market is very very volatile and we have to adjust accordingly. That's why I made the decision to do a repair only on 1/2 of my position. Will tackle the other half later. You have read how I approached the problem from my post on Option G&K.
Right now the stock is being overbought, NASDAQ zooming past 5,000, and QCOM is on fire (good and bad), but
remember quarterly window dressings by mutual funds are still going.
Before April expiry there are events for QCOM: inflation reports (PPI and CPI), QCOM earnings report which they
already said is not going to be spectacular due to softening demand. So, we are in the mids of uncercainty and
overbought situation: not a good time to do a repair. This is the time to close short positions to increase margin
capacity and wait for a pull back to commit more naked positions.
Right now I am staying put with the other half: the extrinsic value is very rich. as we approach the expiry date ( 4 more weeks), the time decay will kick in and the extrinsic value will erose as a result. we still have time.
good luck
paul |
