One of the “to fade” plays I have had on is in $OSTK and included owning the June 22.5 Call as protection. The stock has held up well and does not seem to have any interested in pulling back so I decided to listen to Mr. Market.
Here are the adjustments I have made:
- On 5/28 I let the short stock position hit a stop at B/E. This left me with the Long June 22.5 Call
- Later on 5/28 I exercised the Call
- A short time after that I added a June 25 Collar (short the 25 Call, long the 25 Put) for a $2 credit. This greatly reduced the initial outlay for the June 22.5 Call that I had bought initially as protection
My current net on the Option pieces is -$.55 and with the June 25 Collar I have 2.50 locked in on the current trade so this leaves me with a $1.95 net on the overall trade as of now.