V. 20:12 (48): Explore Your Options by Tom Gentile

V. 20:12 (48): Explore Your Options by Tom Gentile
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Explore Your Options by Tom Gentile


Does doubling down on a losing options position by purchasing more and thus lowering the breakeven point work the same as it does with stocks? Thank you. — Fiorenzo Primavori, Genoa, Italy

Yes and no. As a way of dollar cost averaging, yes, this does work. If you decide to buy IBM 70 calls for 7 points and then the stock breaks down, you could purchase an equal number of call options for a lower premium, thus bringing your breakeven down closer to today’s price.


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