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Sold ITM Put options, what to do?      7-Nov-09 07:49 am    
I sold cash secured put options (12.5 strike for Nov) and got burned really badly (was down -200+%, now -100%, break even is 11.85). These options have little time value left (5 cents). I'm neutral to bullish on ATVI. I think a target price of $12.50 for this year and $14.50 for next year. Is it better idea to take delivery or roll them out 2 months later with a better chance for them to expire worthless?

I'm thinking of waiting 2 weeks to around expiration, if it is in low 11s, to take delivery and then sell $11 puts and leverage up (2x), or if near $12.50, to roll November short puts out 2 months forward and collect a 40 cent premium.


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cheaserceas...

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  Subject Author Rating Time of Post (ET)  
 
Sold ITM Put options, what to do?
cheaserceas... Not rated 7-Nov-09 07:49 am  
 
I've sold 12.5 puts for a 11.85 net cost as well. ...
dontworrybe... Rate it 7-Nov-09 09:58 am  
 
Was there a specific advatage in selling cash...
ratn0007 Rate it 7-Nov-09 10:14 am  
 
The two are virtually equivalent, but th...
dontworrybe... Rate it 7-Nov-09 11:10 am  
 
ITM calls take two transactions and...
cheaserceas... Rate it 7-Nov-09 11:34 am  
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Activision Blizzard, Inc. (ATVI)

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