When you hit a grand slam home run in you’re first at bat, you want to remember to touch home plate. Otherwise the guys in the dugout will never let you live it down.
That sounds like some life wisdom that could translate to the world of finance, but of course none of us are in the position to give you or anyone else here financial advice, so this conversation should not be considered as such. With that disclaimer out of the way, I am glad to hear you sold half your position. That books some profit and gives you powder for your next move. Looks like you followed some advice I give myself when I buy an option one day and it is up big the next. I tell myself, if the market proves you correct immediately, take profits. Why wait until expiration date? If I bought some cheap way-out-of the money options, I might sell 60% and let the rest ride.
Those OTM options often expire worthless, as most do, but then people don’t think about how many times Mickey Mantle struck out; they just remember the big hits. If you are really fresh to options trading, it may be too soon to talk about selling instead of buying them. You need more cash in your account to do this, and there are fewer home runs with this strategy, but when the option expires worthless, you are on the winning side of that trade; you are the one pocketing the money for the option premium and moving on to the next trade.
By selling cash covered puts and covered calls here for about 2 and a half years, needless to say, I have accumulated a few shares (although probably fewer than many here). Down or flat markets are just as good for taking money off the table, but, I must admit, rallies are more fun to play. The experts will tell you not to get emotional about your trades, but, hey, every trader has a pulse, right? The trick is to stay in control and be patient. I do have a few end-of-year calls out there (that folks like you are smiling about right now), but also a put position expiring at the end of this month. I will sell another put if we see another sizable dip. GLTUA.
Conversation overheard in a swamp:
"I like your coat."
"This old thing? It's just a standard coat. Although it is double-breasted, so I guess that
makes it a double standard."
"Where can I find a double standard like that?"
"Any Banana Republic."
