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Strategies & Market Trends : Calls and Puts for Income

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To: Delfino R Zavala who wrote (5765)8/28/2013 9:30:47 PM
From: Bearcatbob   of 5891
 
Delfino,

One criteria I use is if the money tied up in a trade can be used to generate more money than it takes to close.

Say you have a share that soars in value that you had covered with a call. If you can close the trade for less money than you can make with the freed up money - with commissions - I would likely do it.

Similarly, if you have a short put on the stock goes up you can close the put and free up the money for another trade.

To me it is all about making your money work. When a trade becomes dead money - it is IMO time to put the money back to work.

Bob
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