The very first book I read on options was the ten biggest mistakes an options trader could make. I forgot which number it was but telling anyone about an active trade was a big called mistake. Here, once again is an example. I have had lots of profitable trades in the last month, but the one I wrote about has turned in to a loser. BWNG covered call. Still at least it is only a small loser and if I take the risk of not covering my call when I sell the BWNG shares tonight then at I will come out even. Though that would leave me naked short on BWNG for four months. Umm might be worth the risk, but if a buyout came the price would shoot up and I could lose even more than the $340 that I should close out for tonight.
The upside takeaway from this is if I had gone long the shares at the original $5.15 I would be down $1270. SO once again the options strategy comes out ahead.
Also, by using turtle approach of cash management and only taking a part stake to begin with I limited the loss the on this position.
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