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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: HF who wrote (6099)	12/12/1997 9:06:00 AM
From: Greg Higgins	Read Replies (2) \| Respond to of 14162

HF writes: I did write three Jan 25 puts on VVUS, for a premium of 4. I'm not sure what repair to do now. I'm afraid that VVUS price being so low now that I could get called on the stock before Jan expiration and the stock will be put to me at 25. Your repair is simple. Buy back the puts. Nothing you do will keep you from losing $800/put except luck and promise. The only thing that keeps the person who owns the puts from putting them is the promise of the future growth of the stock, or the expectation of a further drop. The decision you need to make is when to buy back the puts. The longer you delay, the more likely you are to get assigned, if the stock doesn't recover or falls further. On the other hand, if the stock recovers, by waiting you could get out for less. I don't see that rolling gives you any benefit.