Alan answers a question posed by Tim, who asks:
I purchased 100 sh SNV @ 43.25 on 4/24/17.
I sold 1 contract @ .85/sh 44 Call.
I did my one week position management inspection of this equity on 4/30/2017.
I noticed the stock had a gap down of 41.80 that happened on the 27th. Stock is already below my breakeven of 42.40.Do I manage these trades on a daily basis?
To protect myself against this loss, can I set up a sell command and sell the stock at breakeven? If I auto sell command and sell the stock at break even, how do I handle the option since I no longer own the stock?
This was virtual trade.
It’s the 2nd Wednesday of the month. Time for another original episode of Ask Alan. AA#136, “Closing a Covered Call Trade after Share Price Declines”
If you want more “Ask Alan” videos, you can! Become a premium member today, and tune in to the educational power of the complete library!
To enter your questions to “Ask Alan”, fill out the form on the contact page. Be sure to begin your message with “ASK ALAN”