I figured out a way to possibly save an options investment
that has gone bad. If you buy more of
the same options (same strike price and calendar date) when it has gone down to
its lows, you can realize the profit on the way up. Case in point: if you bought 3 options contracts
of AT&T at $0.18 then as of today (6-20-12) you would be at a loss because
they went down to $0.12. However, if you
buy 15 options contracts of the same strike price at the new low of $0.12, you
can realize a profit once you get back to break even of $0.18. As with any trade make sure you calculate the
commission costs ON BOTH SIDES OF YOUR
TRADE when you do your break even analysis.
Always go with the total cost amount not just the face value of the
option.
No comments:
Post a Comment