tekboy:
as ed posted, there is not much you can do especially since it is jan02 leap. if you own call which has a near term maturity, in some cases you might be able to roll it down and out to reduce or loss or even to avoid the loss while wait for the stock to recover.
in a beginner's option class, they always stress that the buyer of an option has all the choices while the seller has only one choice. They forget to say that an option seller has a repair strategy more so than an option buyer.
i don't know what your cost basis is on that qcom call jan02/220. have you considered just taking the loss and move on?
if you like qcom at 220 + call premium in jan02, and in your view qcom is only going to get better (i am bullish on qcom although i still question their spending on netzero - i hope qcom is not trying to be a hero and ending up a zero), do you like qcom at 103 in jan02 (right now qcom is 109 3/4). if the answer is yes, and i if am in your place, i would do the following:
a. close my jan02/220 call and get 18 1/2
b. sell jan02/220 put at 117, collect $ 11,700.
c. wait for qcom to recover and might close the put when the time gives you a profitable opportunity.
that money will earn interest in your margin account.
caveat #1: naked option is risky, and make sure you have the ample margin capacity to maintain.
caveat #2: not intended as an investment advice.
Good Luck
Paul |
