The best way to lower your risk is sell the stock and buy In the
money calls for June. You can use the
left over money for other trades. A simple stock
substitution strategy. I like the 5.00 strike
better than the 6.00 because you have a higher delta.
Posted by fixdgear on 21st of Jan 2011 at 09:47 am
i want to be long....i do not want to short the stock...my loss
is unlimited....the stock will always move in greater tandem than
the option...the option time premium will run out as well....i may
need to hold the stock a little longer than anticipated while
option time premium runs out....like i said i just wanted to add a
little to my long position with virtually little risk of
capital....if i want to short a stock ill buy puts.
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take off risk
how to choose options?
Posted by zach06 on 21st of Jan 2011 at 08:35 am
The best way to lower your risk is sell the stock and buy In the money calls for June. You can use the left over money for other trades. A simple stock substitution strategy. I like the 5.00 strike better than the 6.00 because you have a higher delta.
why would i do that?
Posted by fixdgear on 21st of Jan 2011 at 09:47 am
i want to be long....i do not want to short the stock...my loss is unlimited....the stock will always move in greater tandem than the option...the option time premium will run out as well....i may need to hold the stock a little longer than anticipated while option time premium runs out....like i said i just wanted to add a little to my long position with virtually little risk of capital....if i want to short a stock ill buy puts.