At this point, we could be seeing some price stabilization, but I am playing it safe and waiting for some kind of confirmation regarding the fundamentals of Hi-Crush. If their next earnings report surprises to the upside and we start hearing frac sand producers say that conditions are improving, then I would probably activate the trade.
I have started selling naked puts however, since some of these options would provide me with enough premium to give an adjusted cost basis around 1.85-2.85. If I am assigned this stock at these price levels, then I would be more than comfortable with that long term, and if not, then the premiums collected will hopefully somewhat offset the opportunity cost of waiting if I buy in later at a higher price.
I have started selling naked puts however, since some of these options would provide me with enough premium to give an adjusted cost basis around 1.85-2.85. If I am assigned this stock at these price levels, then I would be more than comfortable with that long term, and if not, then the premiums collected will hopefully somewhat offset the opportunity cost of waiting if I buy in later at a higher price.
Comment:
Buying back half of my $2.50 naked puts at a considerable gain per contract today... raised more cash and now looking for a pull back to buy HCLP stock outright.
Comment:
Also, if anyone has questions about what I mean when I describe options moves, feel free to ask. I only do simple 1 and 2 leg strategies, so nothing too crazy!
Trade active:
I am beginning to cost average in at $3.75; buying 1/3 position here.
Also selling Puts that, if assigned, would give me a cost basis around $3.10.
Also selling Puts that, if assigned, would give me a cost basis around $3.10.