strategies with a stock in portfolio

[optioning]

Hello everybody,

I would like to learn which option strategies to use with a share in portfolio.

Please assume I have a stock in portfolio and the following data:

Buy price of the stock in portfolio = 2

Actual market price of the stock = 0,35

Strike price available in June 2021 = 2,2. About this strike the following data:

Call bid price = 0 / Quantity call bid price = 0

Call ask price = 0,025 / quantity call ask price = 200

Put bid price = 173 / quantity put bid price = 400

Put ask price = 1,97 / quantity put ask price = 200

 

In this situation , I should sell a call with expiry date June 2021, but by considering the actual market price of the stock, is it the best idea? Are there some chances to sell it with that strike price?

[Yowster]

1 hour ago, optioning said:

Hello everybody,

I would like to learn which option strategies to use with a share in portfolio.

Please assume I have a stock in portfolio and the following data:

Buy price of the stock in portfolio = 2

Actual market price of the stock = 0,35

Strike price available in June 2021 = 2,2. About this strike the following data:

Call bid price = 0 / Quantity call bid price = 0

Call ask price = 0,025 / quantity call ask price = 200

Put bid price = 173 / quantity put bid price = 400

Put ask price = 1,97 / quantity put ask price = 200

 

 

 

In this situation , I should sell a call with expiry date June 2021, but by considering the actual market price of the stock, is it the best idea? Are there some chances to sell it with that strike price?

I don't see much of a point in selling a call for $0.02, especially if you're going to pay a commission in doing so.     Options stratagies for these extremely cheap stocks often don't make much sense as even a $0.50 strike distance represents a very large percentage move for the stock.

[optioning]

Thanks for the answer. In this case, selling a call would help to reset the loss. The alternative would be to buy a put.

Looking at bid and ask for the call and the put, which is the best solution to reduce the loss quickly?

 

P.S.: sorry bid put price is 1,73 (not 173)

[Yowster]

13 minutes ago, optioning said:

Thanks for the answer. In this case, selling a call would help to reset the loss.

Selling a call for two cents isn't going to reset anything, you might wind up with a penny credit after paying commission to sell the put

 

14 minutes ago, optioning said:

The alternative would be to buy a put.

Buying a put will only see its value increase if the stock price falls more.   So, buying a put is something to protect against further downside, not to lessen a long position that is already at a loss. 

 

Due to your long position being in the penny stock category, I don't think you are going to find anything you can do with options to substantially reduce your loss.