Recently I received an email from an investor who was assigned deep in the money naked puts in Bristol-Myers Squibb Stock. I am also holding deep in the money naked put positions on BMY Stock that can be assigned at any time.
There are many different strategies that can be used to repair this type of loss. This article shows how by focusing on recovering the loss quickly an investor can set realistic goals and implement strategies that can work to both protect repair positions as well as recover losses in a shortened time span.
I’m in a bit of a fix with BMY. I’m looking for a suggestion or two to get myself out of it.
On 8/11 I was assigned 200 $67.50 BMY shares. I’d like to get rid of the shares by selling ITM covered calls. However, Aug, Sept, & Oct strikes will not get me to break even. I can break even if I use Jan 2018 $60 calls. Although I think BMY stock will be above $60 in 17 months, I don’t like being exposed for that long. Any better ideas?
Suggestions and Tips:
The focus on the repair should be to recover the loss quickly to get the lost capital back generating more income. The longer capital is not generating income, the slower the portfolio grows.
Here is a strategy that I have used many times to quickly repair this type of situation and get my capital back working for me. Done right, the repair itself can also begin immediately to generate income for my portfolio.
The collapse of BMY Stock was sudden and quick allowing no time for rolling down or rolling out until after the stock collapse. That also means at some point………the rest of this strategy article is for FullyInformed Members. It is 1200 words in length and requires 3 pages if printed.
Disclaimer: There are risks involved in all investment strategies and investors can and do lose capital. Trade at your own risk. Stocks, options and investing are risky and can result in considerable losses. None of the strategies, stocks or information discussed and presented are financial or trading advice or recommendations. Everything presented and discussed are the author’s own trade ideas and opinions which the author may or may not enter into. The author assumes no liability for topics, ideas, errors, omissions, content and external links and trades done or not done. The author may or may not enter the trades mentioned. Some positions in mentioned stocks may already be held or are being adjusted.
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