gbx Greenbrier

[Centeron631]

Greenbrier

Sol et al

i bought a Dec 2021 call on this in early March @60 currently trades around 46.70 (today underlying up 5%) and my call is down about 46%. Unfortunately just after i bought 2 weeks later TI came out with an update nixing this stock, which i somehow missed. Should i bail as soon as possible or what u think? thks
ps have noticed all 3 of my green stocks have been in malais lately.

[SOL]

It is still consolidating on the weekly charts, moving from overbought to neutral and then possibly to oversold. On the monthly chart, it still has room to run.

If anyone is going to purchase options on their own on stocks we have pending orders on, then make sure you never get into the stock unless it trades within the suggested ranges. We will never cancel a play if it trades within the suggested ranges. In general, one should aim for the midway point between the suggested entry prices. The ideal strategy but it means fewer fills would be to wait for the option to trade as close as possible to the lowest suggested entry price before purchasing calls.

Options are fun when things go right and hell when they go wrong, so you need to make sure that you have all the odds stacked in your favour. Options are an undisciplined trader's worst nightmare.

[Centeron631]

To Sol et al

"one should aim for the midway point between the suggested entry pricesof the underlying stock. The ideal strategy but it means fewer fills would be to wait for the option's underlying stock to trade as close as possible to the lowest suggested entry price before purchasing calls".
At least this is how i am reading above and please correct me if i am wrong

Sol thks for above - u did give that option call suggestion at the time and said it as "speculative" and i believe u suggest all options are speculative?

On time decay one of the more experienced members suggested because of time decay he never let's a stock option get closer than 5 months to expiration date. Do u have some sort of cut off time in getting close to expire date or do u just play the chart on it and go as long as it is in overbought and not extremely overbought for a call? but maybe cut out before one month in monthly options in any event?

thks again for taking the time to clarify for me and hopefully others.

[SOL]

To Sol et al

"one should aim for the midway point between the suggested entry pricesof the underlying stock. The ideal strategy but it means fewer fills would be to wait for the option's underlying stock to trade as close as possible to the lowest suggested entry price before purchasing calls".
At least this is how i am reading above and please correct me if i am wrong

Sol thks for above - u did give that option call suggestion at the time and said it as "speculative" and i believe u suggest all options are speculative?

On time decay one of the more experienced members suggested because of time decay he never let's a stock option get closer than 5 months to expiration date. Do u have some sort of cut off time in getting close to expire date or do u just play the chart on it and go as long as it is in overbought for a call? but maybe cut out before one month in monthly options in any event?

thks again for taking the time to clarify for me and hopefully others.

Each person has a strategy that they are comfortable with and generally, I can’t disagree with his strategy of cutting out when there is less than five months. However, that strategy is based on his risk tolerance. We have had options that have surged when there was only one month left. We prefer to get into options with 9 months plus of time.

When we issue options that have less than 6 months of time premium on them we are taking on more risk and the risk moves even higher with options that have 3 months or less on them. However, these options tend to move very rapidly if things work. If one is playing with options that have less than 9 months of time premium on them, then one should play only with risk money.

In terms of cut off time. We generally don’t like to hold onto options that have less than 3 months of time premium unless we are willing to take on much higher levels of risk. A cut of time between 3 to five months is something to keep in the back of your mind. Once you close the position you can roll over to an option with more time premium on it

Just remember with options and futures you can be right and still lose because you don't have enough time premium. So the idea in general is to roll over and buy more time premium if the cut off threshold is hit.