Criscmt
Member
Looking for inputs around my current position, appreciate your help!So that factor isnotnow against me
Inputs can make the situation a learning opportunity for me.
On Tuesday (yesterday) and Wednesday (today) this week, I sold 04/09 750C, 755C, and 770C.
Here's my thought process and rationale for selling those calls.
- When it comes to options, I tend to ask myself if I am being Greedy or Fearful, always better to err on the side of fearful.
- A key criteria for me, I would rather take loss and buy back the options than let my stocks taken away and ITM options closed out (sold against stock and ITM LEAPS I have). This influences my strike and expiry on the options sold.
- I thought 30% gain in 2 weeks from this Monday open is of low probability given the macro climate.
- Sold 2 weeks out to give me enough time to roll, one week might not give enough room to buy out or roll
- I have margin, if P&D disappoints hugely and stock reacts very negatively I wanted to have at least a small cushion added to the margin through this sale. I guess, my margin is sort of putting pressure on me to err on the side of making some money, as long as I will have opportunity to roll the calls at least with almost no loss.
Here are the paths the stock can take next week
- Worst case, up 30+% from current price: If the stock price goes up a lot, say to $850 by say 04/07, will I have the risk of getting the calls assigned by Wednesday and not have the chance to roll?
- Up by ~20% from current price: Stock goes up, say to 800 or over 800 by Wednesday (04/07). Looks like I will be able to roll into 900C expiring 30 days from 04/07. I am using option-price.com for an approximation of the 900C. Let me know if I can. use better tools here. I have accounts with multiple brokerages.
- Up not by much, or stays flat: Stock at best moves up a bit, say to $730 by Wednesday (04/07). I guess I might be able to roll.
- Goes down: Not much to worry about.
Trickiness with decision based on the price action tomorrow (04/01).
- If the stock goes up significantly tomorrow, that lowers the odds of a significant rise next week.
- If the stock goes down, there's some chance of positive surprise, and rise next week. So, maybe I should close my positions if the stock goes down significantly tomorrow?