Options Strategies can be used for a variety of purposes. Options Strategies can be used to protect positions. Options Strategies can be used to profit from positions. Options Strategies can be used to take a losing trade and return it to a winning one. This strategy article is from the Members site. It looks at Options Strategies that can be successfully applied to a Microsoft Stock position that is bleeding capital and return the trade to a profit both short-term and long-term.
Microsoft stock as regular readers know is among my favorite stocks and I have applied many Options Strategies in the past to my Microsoft Stock trades. Over the more than 10 years of trading in Microsoft Stock I have been caught with naked puts that ended deep in the money and at times I have been assigned shares far above where Microsoft Stock was trading at the time.
To recover has always been easy through using various Options Strategies. The two key ingredient needed are knowing which of the variety of Options Strategies available would be best to use to rescue the losing trade and having the patience to withstand the emotions of the market environment itself. Basically staying focused on the “prize” as it were. Through using the right combination of Options Strategies any trade with most large cap stocks can be repaired and returned to profitability.
Microsoft Stock Investor Repair Questions
An options strategies article this morning on the Members website looks at just such a repair strategy on Microsoft Stock. Recently an investor emailed me regarding his problem with his position in Microsoft Stock. Back in July the investor had sold the $29 naked puts and was assigned shares. He then bought some calls which was a mistake as Microsoft stock fell lower leaving the calls worthless. He is down about $14,000 with an average price of $29.56 on 3750 shares. Here is his email to me. The email was quite lengthy and I have edited it for this article.
I would like to get an opinion on how to fix my MSFT Stock trade. I put these trades on before I found your site and now I now how to time better. About my Microsoft Stock position I am holding a total of 3750 shares in total with most of them having been assigned to me after selling puts. My average price is $ 29.56 plus I had bought some calls that expired worthless, so I am down about $14,000. How would you work puts and calls to turn this into a winning position? I know the stock will recover but I need to harvest premium in the mean time. I have plenty of cash and margin available for a strategy. I am not overly worried about Microsoft Stock falling lower as it always trades in a range and is in the beginning of a new product cycle. For a goal I would like to keep some stock as a core holding and reduce my basis. The other stock I would like to sell. It would be great to learn how to safely get my cost bases to zero on my core holding. I can commit more capital to the trade as needed, 25K to 50K is fine. As for a time frame this is in my long-term holding account, I do not need additional income to live on but am looking to grow wealth for the future. I am hoping to use this trade as a start to learn and perfect a life long trading skill I can use over and over. I have read almost every article on your site and I am interested at getting better at them as they fit my trading style. Brad.
Options Strategies To Consider
In part 1 of the article I show Brad which of the many options strategies available I would use to protect his core holdings. The article is a step by step process showing the ins and outs of using the strategy as well as steps to take to confirm options strategies that are in use. The second part of the article will look at the steps that can be taken to boost the entire return for double-digit gains with limited risk and no real addition of capital.
Microsoft Stock Internal Links
Microsoft Stock External Links
Microsoft Stock Investor Relations
Microsoft Stock Financial Statements