Caught With ITM Short Calls On GMCR Buy Out

One of the option strategies that I recommend against is shorting calls in a bull market. Bull markets can be tricky. What looks like a stock in trouble can often lead an investor to short calls in the belief the stock is heading lower.

Instead, the stock turns around and roars higher leaving the investor with deep in the money (ITM) short calls and staring at losses unless the trade can somehow be rescued or repaired.

Often when a stock moves higher, an investor who is short the stock or call options has time on his side to make adjustments and repairs.

A number of investors emailed looking for any suggestions to repair short call positions that got caught on the run-up in the stock. This article is a strategy article looking at short call positions in a rising stock……..the rest of this strategy article is for FullyInformed Members.

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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.