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Investing Strategies / Options - You Make the Call


Subject:  Re: Cure for Covered Call Root Canal Date:  3/26/2015  12:14 AM
Author:  Demotage Number:  11035 of 11357

The timing could not have been worse. By the time of expiration, the stock had climbed to 107 and it was just too pricey to buy back the option. Plus, I had the suspicion that the price would ease off after a fast climb. So I just let the contract assign and the shares were called away at 90, giving me a profit of just under $1000 (and a "lost profit" of about $1700). Which is painful, but as pointed out, not as painful as an actual loss.

My hunch has played out - as the stock has now dropped to $100. If it had been at 100 4 days earlier, I might have employed your strategy. But now I have the money in my account and I want to get back in.

I'm thinking not buy the stock this time, but rather set up a diagonal or maybe a synthetic long. Any thoughts?
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