Hi all, I'd like to get an opinion on what are my best options, lol, on my options on AMD.
Current position:
- Sold 160 June 21 put option a few days ago at 5.90, as of now it's trading at 2.98 -> $292 unrealized gain
- Bought 150 June 21 put option today at 1.00 to protect myself
- So currently my R:R is basically 1:1 -> -510:490
I'm thinking about best way to proceed further:
- Buy back short option and lock in gains, after that wait for another down move in AMD and sell another June 12 160 put option while keeping long option for protection. Downside is that it's possible AMD doesn't go back to $160 or it does too late and the premium to sell is too low
- Keep everything as is and let the short leg decay and then unwind whole spread close to expiration, given that AMD doesn't tank lol.
- Something better??
Advice on best move in my current options position
byu/face_name_997722 inoptions
Posted by face_name_997722
5 Comments
Ugh … why? You believe in the direction or not… simple. Personally would’ve never bought a PUT.
If you are going to do this just do a vertical, pick your legs and believe but hedge where you want/need to for your bankroll/risk tolerance.
A successful trade should always be based on a well-defined thesis. Rather than trying to cover all bases in the market, focus on whether your thesis is correct or incorrect. The trade should serve to capitalize on your thesis, not the other way around.
oh boi
exit
but calls for 170 and see then triple
Let me see.
1. You sold a put (single leg) on AMD, exposing yourself to a potential $160 loss for a return of $5.90. Mistake #1
2. AMD started moving in your favor so you decide to hedge your position by turning it into a spread. Mistake #2
3. Now you want to close out your trade a few days before expiry, letting some of the option value go instead of decaying it to zero. Mistake #3
It worked out in your favor this time, but sooner or later it will all blow up in your face.