This week is the final week in the US if you are trading options. This Friday will be expiry date.
We brought share (TSL) at $26.00 and put and sold a “in the money” option at $26.00.
We looked at this stock as saw it trending up for the last 6 months, and considered not to put a stop in. What that means if the stock goes south, (the value of the stock goes down) then we would be able to pass the stock to someone else.
We put our stop at $23.50.
During the month stocks tend to go up and down, but as long as the shares were above our option of $26.00 on the 3rd Friday of the month. Then the stock will be taken from us.
As Murphy’s law was working our shares finished today at $18.29, so unless a huge market shift… which can happen, we will be down alot on our investment.
Ahhh you say… and we say too… we have a stop/collar in place at $23.50. So we are now able to give our stock to another person who will pay us $23.50 per share, even though out shares are $18.29.
Yes we have lost a little, but we do not own shares that have “tanked”. And we can go back into the market again, because you have to always persevere, when it comes to learning about the markets, and investing. You will make loses, but you make more profit. This is successful trading!