Stocks & Commodities V. 30:5 (26): Explore Your Options by Tom Gentile

Stocks & Commodities V. 30:5 (26): Explore Your Options by Tom Gentile
Item# 302EYOPDF
$2.95
Availability: In Stock

Product Description

Explore Your Options by Tom Gentile

DOUBLE DOWN OR UP?

If a trader is long stock that goes against him and heís unwilling to sell, are there any option strategies to recoup those paper losses without laying out more capital?

Hypothetically, anything is possible. But itís also true when a trader opens up his portfolio to options, there are more opportunities to produce a larger profit or reclaim open losses faster. For a longer-term investor intent on holding shares despite an existing loss, one such strategy is called a double long position.

In an unprofitable long stock scenario, a double long consists of executing a ratio front spread as close to free or a credit as possible. Thatís easier done than said. The front spread looks to purchase a lower strike call, typically at-the-money call, while selling higher strike calls of the same contract month. The most popular ratio is 1 x (2). Without stock ownership, this strategy is net short calls above the higher strike, but thatís not necessarily a bad situation to be in, at first at least, as the maximum profit is also at the strike. The breakeven on a 1 x (2) is this profit added to the shorted strike call.




FOR THOSE ORDERING ARTICLES SEPARATELY:
*Note: $2.95-$5.95 Articles are in PDF format only. No hard copy of the article(s) will be delivered. During checkout, click the "Download Now" button to immediately receive your article(s) purchase. STOCKS & COMMODITIES magazine is delivered via mail. After paying for your subscription at store.traders.com users can view the S&C Digital Edition in the subscriber's section on Traders.com.




Take Control of Your Trading.
Professional Traders' Starter Kit
All these items shown below only $299.99!
  • 5-year subscription to Technical Analysis of STOCKS & COMMODITIES, The Traders' magazine. (Shipping outside the US is extra. Washington state addresses require sales tax based on your locale.)
  • 5 year access to S&C Archive
  • 5 year access to S&C Digital Edition
  • 5-year subscription to Traders.com Advantage.
  • 5-year subscription to Working Money.
  • Free book selection.
  • Click Here to Order