OK, 400 shares of KMI, average cost $30, now at ~$21. It was once at $43, know what I did? bought more! Ha! Options market shows little expectation of price movement from $21.
Here's my idea: Sell 4 covered calls, JAN 2019 $18 (~$5 per stock). Pocket $2000 today, lock in a max loss of $2800 instead of $3600. Scenarios:
A) Price goes down. I buy to cover the calls in 2018 sometime for much reduced price and make out with $1000 or so I didn't have before.
B) Price stays the same. The time premium disappears and I cover the calls for $1200, making $800.
C) Price goes up. Take a $2800 net loss in 2019.
*Note: I'm looking for thoughts on how to make this turnip bleed, or consequences I haven't thought of. I understand some of the comments will address issues such as: "Sunk cost fallacy, sell it all now and invest it wisely", or "stop speculating in the market", or "this post belongs in WSB". These comments will be ignored.
Submitted April 19, 2017 at 04:22PM by recommendmeapodcast http://ift.tt/2pDnxf2
