Author Topic: unwind long term option position?  (Read 1135 times)

goodrookie

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unwind long term option position?
« on: December 02, 2014, 04:48:17 AM »
Hi Everyone, I am new to investing and to this forum. I had a few Apple stock and I had sold long term OTM call option and bagged around $10 per stock. The stock had dropped now and so has the call option price. My options are
1) I can unwind my position now and make small profit ($0.90/stock) and then maybe reselling options every 1-2 months 
2) ignore the market development all together.

Issue with #1 is that I lose my downside protection of $10/stock.
Issue with #2 is my money is tied up in Apple stock for 1 year.

What is a better option (no pun intended)?

jjcamembert

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Re: unwind long term option position?
« Reply #1 on: December 02, 2014, 02:29:40 PM »
It really depends on what your longer-term goals and outlook are. Do you need to sell the stock soon or think it's no longer a good investment? Personally I hold onto the call as long as possible, because it won't start decaying as fast until closer to expiration. Also as long as you hold Apple you are getting their dividend, which is an added bonus. If the stock starts moving close to ITM, again depending on your goals, let it get called (then sell puts!) or roll the call out for more premium.