Yesterday, I established a 50-contract call option position as MU broke through a key technical level. The position now shows a 132% unrealized profit. This ranks among my best single trades recently, yet it presents a classic dilemma: should I lock in profits or continue holding?
MU Call Option Yields 132% Daily Profit: Time to Exercise Profit-Taking Discipline, or Let Profits R
byu/Logical-Setting940 inoptions
Posted by Logical-Setting940
5 Comments
Sell half and let the rest free ride
Dude. This has to he engagement-baiting. If you took that position, deliberately on the factors you referenced, you also had a target profit.
If you hit your target-> Sell. If you haven’t yet -> let it run.
Personally I would look at the Deltas to know your estimated return per dollar $MU increases as well as the probability the Calls expire in the money. I would look at the Theta to understand the cost per day of holding the position.
Most likely I would be selling at least half of the position to lock in my profit and to free capital for new moves.
Any time you get to that point (and you think there’s still room to run in your direction), sell enough to make the rest “free”, and let the rest go. That guarantees an overall no-possible-loss on the original position.
If it continues to go in your direction, consider adding stop-limits to lock in part of the profits, and bump those limits up periodically, following along far enough behind to not get stopped out on a zag.
I would hold it. Memory shortage won’t get better for years. Memory is like gas a guy calls your computer store everyday with a price. Monday it’s $37 Tuesday it’s $38 so on and so on. So this new revenue will be reflected in earnings.
I think a lot of depends on the expiration date of the contract too. Is it expiring today, next week, several months from now? Depending on how good your entry is, 132% gain is not that crazy.
I routinely see 1K% percent trades on my site for monthly time-frame trades if your entry was good. Obviously nobody can tell you what to do, the safe play is definitely sell half and let the rest ride.
But if you wanna be greedy, just putting it out there that 132% isn’t that crazy and it wouldn’t even crack the top 100 of highest gain trades for today.
For example, there’s a 3.8K% gain on MU overnight calls (bought yesterday sold today) for example. I can’t say for sure since it’s not a quote verified trade yet, but that’s probably about right.