Quote:
Originally Posted by Schmandis
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What about buying a put further out of the money to cover the downside risk?
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Yeah a 17.50/15$ put credit spread expiring on Jan 15th on Nikola puts your 150$ up against the 100$ delta between the two. Not a bad play. Potential 66% gain, but you're also increasing risk for a complete loss of that 150. I suppose it depends on your risk appetite, I don't think Nikola will continue it's downward slide through Jan 15th though. Likely close on Jan 15th 22-24 dollhairs despite the Sheckel Lord's attempts to trickle bad news to keep the volatility up and the stock price seesawing about the low-to-mid 20$ mean.
I am trying to avoid going into further nuanced option trading since explaining the conceptualization of option mechanics at their simplest forms seems to evade several people on this topic so far.