Just 4 trading days ago on Feb 4 I setup what was then a deep buy-write trade for a couple of weeks on Bank of Nova Scotia stock on the Toronto Stock Exchange in Canadian dollars.
Fears over the banking sector which started yesterday in Europe have spread to North America and today they really hit the Canadian Banks hard.
Bank of Nova Scotia stock this morning fell to $53.47 blowing right past my $54 in the money covered call, now out of the money.
This means the trade must be repaired to keep the capital safe and the profit as intact as possible. The focus though has to be on capital preservation. Luckily I had my plan ready the moment I placed the trade back on Feb 4. With my plan at the ready I knew when to act, how to act and how to now put in place a second plan after the rescue this morning of my trade that was at one time holding in the money covered calls.
This is a full strategy discussion article explaining the steps I took and how I manage the roll-down of these types of trades. Rather than being surprised by the decline, the plan is what keeps emotion out of the investment and keeps the trade profitable while protecting the capital that is being risked. This article is 1400 words in length and will require 4 pages if printed……the rest of this BNS Stock strategy article is for FullyInformed Members.
Bank Of Nova Scotia Stock (BNS) Covered Calls Roll-Down for Feb 8 2016
FullyInformed Members can review the latest BNS Stock trade alert and strategy discussion article directly through this link or they can sign in to the full members site here. Non-members can join here or read about the benefits of being a member.
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.