Saturday, September 19, 2009

[TheOptionClub.com] Re: Can I Do This?

 

Vikas - I was thinking that buying back the 44 and selling the 45 would give me a debit of .48, but as Chris said, I would just end up selling my existing long 45. So to answer my own question, yes, I am crazy. So, I just took my .61 loss earlier that day.

- Jeff

--- In OptionClub@yahoogroups.com, "vikas_basantani" <vikas.basantani@...> wrote:
>
> Hi Jeff, while Chris has provided a clear response, I am still wondering what made you say that if you were able to do this, your loss would be 0.48 (and not 0.61) no matter what happens. Am I missing something here?
>
> Based on my limited knowledge, the only way to "lock-in" a loss would be to get into a box but for that purpose, you would have to short the 44/45 put spread.
>
> Cheers Viky
>
> --- In OptionClub@yahoogroups.com, "Chris" <chris@> wrote:
> >
> > Jeff,
> >
> > I don't know if you're crazy, but you're not appreciating the full
> > picture. If you buy the 44 call you will have closed out your short
> > call position. If you sell a 45 call you will close out your long call
> > position. My guess is that you're thinking you can simultaneously be
> > long a 45 call and short a 45 call in the same account. Even if you
> > could, your two positions would cancel each other out. Whether you want
> > to realize your .61 loss or not, it really is there and no amount of
> > creative thinking or wishing will make it disappear.
> >
> > Christopher Smith
> > TheOptionClub.com
> >
> > --- In OptionClub@yahoogroups.com, "JeffreyW" <jeff@> wrote:
> > >
> > > I have a SEP Bear Call Spread on JPM at 44/45. As of this moment, the
> > 44 is ITM (JPM 44.65).
> > >
> > > Just asking, but is there any reason why I cannot buy back the 44 and
> > sell a 45? I would then have a 45/45. If I just closed this I would take
> > a loss of .61, but if I did the above, my loss would be .48 no matter
> > what the price does today or tomorrow.
> > >
> > > Am I crazy?
> > >
> > > - Jeff
> > >
> >
>

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