Replies to post #29576 on Options Wonderland

[OptionMonster]

10 $470 PUTS @ $800/each 10 $670 CALLS @ $150/each Total Cost: $9500

Sell 10 $470 PUTS @ $1200/each

Net: $2500 or 26% gain

[SherriT]

OK Threeflight...let me break it down....

$800 for a single put.
$200 for a single call.

Sold single put this morning for $1400 -that is a $600 gain.
If you want the position totally closed, the $200 call is worthless. $600-$200 equals $400 profit.

HOWEVER, if I have the option to HOLD the call, I would hold it for the swing back up. No reason I have to take that loss today.

Do you understand now?