When did you write the calls? And at what price? What's your net cost on the PTEN shares?
Looking at the charts, you should have bought the calls back the first day or two this month; both the stock price and rsi began trending upwards at that point, coming off the lower band. Oh well... I've certainly missed my share of opportunities...
So, your position:
You own 1000 shares of PTEN, currently worth $6938.
Your net cost for the 1000 shares is ????
You've written 10 Sep 5 Calls, for less than $2125, which is the current buyback cost.
If your net cost is less than $5, you could leave the position alone, and wait until expiration. You'll probably get called out, but you'll have some profit. It's possible that PTEN will bounce off the upper band and drop back to $5 before then... possibly with the assistance of another series of market drops... but it doesn't look likely.
All of my charts (BB&RSI, Three Line Break, Kagi) indicate that PTEN has started what could be a major uptrend. If it breaks through $8 (probably in the next couple of days) it should go to $10, at least. That's the first major resistance level. After that, if it keeps going, it should reach $12 or $15 before pausing again.
I don't see any major news items which would account for the turnaround that started this month; the last earnings report was released two weeks earlier, so I don't think that could be it. Maybe Herm can figure out if the fundamentals have changed.
Anyway, if PTEN is headed up, you might want to absorb the losses by buying back the calls, and hope to either sell your PTEN shares for a profit, or write some more calls near the peak ($8, $10, $12, or $15.)
If you do that, be sure to write them at least two months out, to give yourself time. If you're following WINS, your goal isn't to hold the options until expiration; you want to have the opportunity to get rid of them well before that.
Doug. |
