Hello everybody,
Just wanted to get some opinion.
I have a long call expiring in 6/21, the contract value is down 50%
However, I still have strong conviction that the share will rise but it’s just that I got the timing wrong and I’m worried about Theta decay.
Would you pay a debit to roll 1 month out while keeping it at the same strike? If so
, how much % do you usually pay in relation to the original long call contract value to justify the debit required to roll is “worth” it?
Would you roll a long call 1 month out despite losing 50% of the contracts original value?
byu/Alstxn inoptions
Posted by Alstxn
6 Comments
You are gambling. You have lost 50% of the money you spent. Do you want to put more money into this trade? How much more are you willing to lose?
What % of your portfolio is this trade?
In the future, you need to identify these things before entering the position:
How much am I willing to risk?
How long do I want to be in the trade?
Identify stop losses and take profits.
Identify management strategy.
What is your thesis based on? Did you ready chart patterns? If so, you should have very clear cut entry and exit points where your thesis is either being supported or is broken.
I am willing to risk $500 on a single call option that I purchase. I am purchasing a 60dte option. I want to roll the position out another 30 days if I lose 25% within the first 30 days. I want to exit the position at any time if I lose 50% I want to take profit at 50% if the stock rises at any time during the contract. I want to hodl until expiration if my call is greater than 70% profit by 14dte.
Stuff like that. I made up a bunch of examples because I don’t buy options, I only sell them.
If an option position is down 50%, your mistake was not closing it out 20% ago. Remember that for next time.
If the contract has lost 50%, the stock price has probably blown past any downside levels of support and your thesis is not accurate anymore. But I don’t know really anything else about this trade.
We would need to know the stock, when you entered the trade, why you thought that was a good entry point, where you saw levels of support/resistance and over what time period you were looking for this price action.
Again, I don’t buy options so I dont know if I’m the best one to ask but if I had lost 50% on a long call, I’d close the position ASAP and start over. I would not dump more money into it. You paid stock market tuition, just make sure you learned something.
NOPE. Just as a thought if you had Sold a 20 delta Put , how would that have done. If the stock goes up, stays the same , you still win.
You don’t have to make it back they same way you lost it
Man, on thing I’ve learned is just the fact you used the word “conviction”, you’ve got too much emotion in this. I’ve struggled a lot with emotion, but you legit can’t have any emotions when it comes to trading.