My Ford Motor Co.(Sym: F) Put option went up in value?

Question

My F December '08 $5.00 PUT option went up in value just now. Should i sell it and go into a more in the money PUT or sell it and buy a PUT with a later date?

Answer 1

I really can't give personal or specific buy/ sell recommendations over the net.

I generally don't like to buy in the money puts or calls too often cause if the stock moves against you the premium is wiped out immediately. I prefer just out of the money.

Answer 2

I have been buying F below 5, with a 2 year hold.  I think it will bounce back.

Answer 3

that's if you have the opinion on F stock's direction. if you believe the down trend is not over yet then keep it for a while.

personally i'd still keep it.  but make sure you have an exit point, normally if my option went down 50% i would go ahead and think about selling it and take my loss.

i've made over 100% profit in 3 options and now i lost 100% profit in 5 options cuz i didnt establish an exit point i was betting instead thinking rationally. You shouldn't hold option for a long run you should take profit whenever it's possible becuase it's very volitale and time value decay will destroy your short term gain if you decided to be greedy and keep holding it.

if i have that put option, i'd probably sell it before thursday's GDP report and buy back before friday's unemployment report. I have opinion on better than expected GDP (causes rally) and worse unemployment report (stock plunge)

as for F stock, it's at it's 5 yr low and i do feel with current market condition it should keep going down.  if it reaches close to 52 wk low and you begin to see high volume trade and stock price start to go up then you need to sell your put, check for ultimate oscillator for oversold condition that's your best bet.  if it keeps going down at it's current pace you should expect an oversold condition in  2 weeks and you may expect a bonuce.. then you should sell your put.

or just whenever you reach 100% or more just sell it to avoid worry and headache it's really hard to catch 400-500% profit the key is don't be greedy.

Answer 4

It is up to you and dont hold my advice personally if you lose money. If you are determined the stock will continue to fall, go ahead and keep it... because when you sell, you are selling at ASK price, a price lower then the option price. And when it is time to buy again, you buy at the BID price, which cost more then the actual price at that point... the difference could have saved you a bunch of money....