HELP - SELECTED WRONG STRIKE PRICE

[Guest Pearl]

I made an error and bought 

NTNX Apr 18 2019 62.50 CALL for $5.30

It's now only $1.91

NTNX stock is only trading at $42 and I don't own the stock

I don't want to average down - what should I do - is my money gone?

[krisbee]

1 hour ago, Guest Pearl said:

is my money gone?

the premium you paid is 5.30, current price is 1.91 as per your post. so the answer is yes, Premium went low. May be due to stock price went lower. (that's the risk on directional buying options)

Please do some research on your stock. You may decide whether to still be in trade (as 6 more months for expiration) or to take the remaining money out to reduce further loss.

Good luck!

[Arthur]

Your mistake was not selecting wrong strike price - but choosing a wrong (too risky) strategy by buying a call and thus making a directional bet on rising stock prices. The NTNX stock lost around 30% in the last 4 weeks, so your call would have lost value regardless of the strike price.

In general, if you expect the stock price to move significantly, then a suitable strategy would be to buy a straddle (a call AND a put with the same strike price and expiration).

Regarding your current situation: like krisbee wrote, your next steps depend on your risk appetite and your assessment of the future NTNX stock price.