GILD is being my PIA trade. Down from 84.75 to 70.63 in less than a month. Usually I can roll to keep up but this thing has violated every support level over the last 6 months and keeps dropping even with institutions starting to buy it now. And the premiums are not high enough to keep up with the drop so each roll was just giving me higher margin requirements.
So anyway, I hedged it to limit my losses to $2851 but is fairly complex. Still short 8 puts at various strikes and expirations over next 17-31 DTE from 78-72. Bought 8 Jan 19 77.5 puts so those are now calendar and diagonals spreads and will roll the puts as the time value evaporates. They cost 12.26 and have over 60 weeks left so should be able to cover those with put weekly put sales and aggressively rolling down to get back to even but will need to add 4-6 to cover the rolls on the puts already. So I need to collect $18 in premium over the life of the LEAPs.
Also rolled 12/1 76 call to 71.5 and converted to synthetic short to cover my 300 shares from a further drop. Will roll the synthetic each week until we have a true reversal and will try to get a credit each week.
Credit of 1.04 on the call roll then BTO the 12/1 71.5 put for 1.80.
So now my losses are capped to what I am already in the hole and hope to make that up with weekly sales and rolling.
Ultimate goal is now just to break even. Learned long ago I don’t need to be right, just want to make $ trading.
Also freed up a lot in margin so can now add some other trades.