Jeff 7:47 am on Friday, February 15, 2019
Tags: DoubleCalendar ( 209 )

TAPped out

$Earnings Closed $TAP Feb15/Feb22 65 #DoubleCalendar. I needed to close the puts, tried to play the swings but then stock started rallying so took an additional .30 loss on the exit. Calendar bought for .34 on Monday.

Ramie 7:51 am on Friday, February 15, 2019

Liked for the title of the post, not the result of the trade 🙂
john4419 7:52 am on Friday, February 15, 2019

Did you close calendars complete or split them between Puts and Calls? Presently Schwab is showing 1.80 debt to close.
- Jeff 8:00 am on Friday, February 15, 2019
  
  You don’t need to do anything with the calls. In fact, I still will have the long Feb 22nd 65 call as a lottery ticket for next week.
  
  For the puts, you have two choices: close both today. Should be closable for 0.00, because they are roughly the same price.
  
  The other choice is to sell the Feb 22nd long puts and take assignment of the stock. Then handle the stock how you want, as a long term holding or exit as soon as it recovers. After selling the puts for over 4.00, and taking the stock at 65.00, you cost basis will be under 61.00.
  
  If your broker is giving you hassles you should call them. “1.80” is NOT the price to close this, and is likely showing up because of bid/ask remnants on the basically worthless call options.
  - john4419 8:17 am on Friday, February 15, 2019
    
    Schwab is showing the following mid price to close. How do they compare with your trading program? Sorry to be a pain, just trying to make sure I understand.
    Short ..15th call 2.25. put 4.50
    Long..22nd call .08. put 8.40
    - Jeff 8:27 am on Friday, February 15, 2019
      
      John, the price of the stock is 60.60. The 65 short call expiring today is worth 0.00. This is important, as a basic concept in options. That call is nearly 10% out-of-the-money with 5 hours left in its life. It is worthless. So when you see a screen saying it is worth 2.25, you KNOW is it inaccurate. The reason it shows that is somebody out there probably has an old “sell” oder still alive for 2.25. So your broker is sloppy and allowing it to show up in their system.
      
      The price on the 22nd call looks accurate. That has a week to go so is probably worth .08.
      
      So again, you don’t need to do anything about the calls. You just need to close the puts.
      
      As for the puts, when an option is ITM around 10% with only a week or less remaining, it is going to be almost all intrinsic value: i.e. its price will equal the distance the stock price is from the strike. Your strike is 65. Stock is 60.60. Thus the price of the 65 put options will be very close to 4.40. The Feb 22nd put, because it still has a week left, MAY show a few extra cents, like 4.45 or 4.50.
      
      On my screen, the calls show NO pricing at all, which also means “0.00,” because they’re virtually dead. The puts both show a mid price of 4.40.
      - john4419 8:58 am on Friday, February 15, 2019
        
        Really appreciate your help with this and at a busy time of the day. I talked to schwab and my screen is now showing the correct data! I have a close order (even) for the put side, doubt if it will fill unless I start to run into debt
        
        Jeff 9:01 am on Friday, February 15, 2019
        
        Yes, I’ve never gotten a fill on an order for “0.00,” usually have to give up .05 or .10. Or try to leg out on the swings. On TAP, I was able to get 4.60 for both sell and buy orders in my TOS account, trading them at roughly the same time.
        
        john4419 9:10 am on Friday, February 15, 2019
        
        Got out at .05 debt. Once again thanks Jeff.