I
cover my short LGF Sep 15 calls LGF@15.4
With
Lions Gate in the money (over the strike price of 15) this leg of the
short strangle is taking on water. I remain short multiple layers of
short puts. I thought 15 would provide resistance. The loss is over
100% on this leg of the short strangle, which sounds alarming.
However, it is a small dollar amount, and is offset by the
probability of profits on the short puts.
/edit to add: LGF closes near unchanged, so at least for the moment it looks like a bad decision. Discussion on use of stops follows: When a position goes against a trader, that trader can choose to use stops or not. The overall market mood and direction are factors when I decide whether to close out a losing position. Some traders place actual stop orders, some use mental stops.
Some traders will double down if a position goes against them. Obviously this only tends to work if initial position sizes are very small. There is no method that will always work. Stops can save a person from big losses during trending markets. However, in a trading range market, whipsaws are common, where a stop level is triggered and the price reverses. Stops may not work if there are big price gaps at the open or after a trading halt.
/edit to add: LGF closes near unchanged, so at least for the moment it looks like a bad decision. Discussion on use of stops follows: When a position goes against a trader, that trader can choose to use stops or not. The overall market mood and direction are factors when I decide whether to close out a losing position. Some traders place actual stop orders, some use mental stops.
Some traders will double down if a position goes against them. Obviously this only tends to work if initial position sizes are very small. There is no method that will always work. Stops can save a person from big losses during trending markets. However, in a trading range market, whipsaws are common, where a stop level is triggered and the price reverses. Stops may not work if there are big price gaps at the open or after a trading halt.
Long
AMGN BRKB ESRX EWG KFT LGF XHB
Net
neutral GLD SPY
Net short IWM XRT
Net short IWM XRT
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