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I was doing so good lately but I got little greedy and I bought Dell, I am down big time now.
Do you guys see any light on Dell or is it going down more? Currently trading around $17. I bought this at $18.25
CNBC Fast Money team said $16.75 - $17.00 might be a good place to buyinto Dell. That does you no good, unless you double down.
Unfortunately, and for reasons unknown to me, Dell is one of the more popular stocks, that does not have weekly options.
If they did, they might let you slowly sell your way out of a loser.
Looking at the March $17.00 calls, they are 50 cents. But, the stock is $17.13, so of that 50 cents you'd only make 37 cents.
If you have 100 shares or multiples of 100 shares, you could sell covered calls and slowly get your losses back.
If the stock has good support in the $16.75 - $17.00 range then your losses may not get worse.
Dell is a good trading stock, it can move around alot on a daily basis.
If you sold the March $17.00 your stock would sell for $17.00 and your losses would be cut from $1.12 to 88 cents per share.
If the stock happened to be under $17.00 on March 16th, then you'd keep the entire 50 cents per share. At that point your breakevem would be $17.75 ($18.25 - $0.50). And you could sell an April $17 call to recover more of your losses.
Other choices are sell and cut your losses.
Buy more for $17.25, so your breakeven price on all of the shares goes to $17.75 instead of $18.25.
Sell the stock you own now, and in case the stock moves up after you sell, replace your stock with a longer term call option.
I was doing so good lately but I got little greedy and I bought Dell, I am down big time now.
Do you guys see any light on Dell or is it going down more? Currently trading around $17. I bought this at $18.25
Well, if a 7% loser is the worst trade you ever do, you'll be way ahead of most people.
I've ridden trades for 40% or 50% swings before seeing them come around (I almost always scale in and out anyway, so I just averaged down).
I also rode a company into the ground once for about a 85% loss. (It was a small position, that still to this day sits in my brokerage account. It's too far gone to sell except if I want to offset some gains for tax purposes.
Anyway, you have a decision to make. If you still believe in your investment thesis you can average down. As Howard mentioned, you can maybe sell some calls if you feel the downside is limited. Also, there's no shame in taking a small loss. Whatever you do, don't p*ss yourself and sell the farm every time you get a pull back -- that's a good way to end up with a lot of losers.
I was doing so good lately but I got little greedy and I bought Dell, I am down big time now.
Do you guys see any light on Dell or is it going down more? Currently trading around $17. I bought this at $18.25
I just made a similar mistake, if it needs to be called a mistake, on HPQ.
However, I used covered calls as part of my strategy.
I bought 500 HPQ at $28.95 and sold the weekly $29.00 call for 77 cents.
The earnings were good, revenues a little light, as is the guidance.
The stock was down near $28.15 or so, but has bounced to $28.48.
Using the weekly option, I lowered my breakeven to $28.18.
It appears the stock, for today at least, will stay above $28.00.
We'll see what the analysts upgrades or downgrades do tomorrow.
Too bad Dell does not have weekly options. I'd be involved in Dell more often.
So, here is how options can help on a weekly basis.
If HPQ holds $28.00 and since my breakeven is down at $28.17, I can sell the crap-o-la out of the weekly $28 calls, if I want to be aggressive, or the weekly $29 calls, etc. If the stock trades around $27.00-$28.00 for many weeks like dead money (due to the earnings), then these weekly option sales becomes income for my account.
I was doing so good lately but I got little greedy and I bought Dell, I am down big time now.
Do you guys see any light on Dell or is it going down more? Currently trading around $17. I bought this at $18.25
I work in IT so I might be a bit biased, but I see Dell going down hill long term. They are getting run over in the consumer market by Apple, tablets, smart phones, and other low cost PC makers. They keep on trying to make up ground in the business space and keep failing. They are not a R&D company, but a company that tries to source the lowest cost suppliers and keep on pissing off OEMs.
I would say possibly look into HPQ, but I failed to pull the trigger at $22 and cant stomach paying more
Would you buy Dell today at ~$17 and sell covered calls against it? Probably not....so then why do it to the Dell you own? Because you're anchored to the price you purchased it for and want to "recover" your loss.
I was doing so good lately but I got little greedy and I bought Dell, I am down big time now.
Do you guys see any light on Dell or is it going down more? Currently trading around $17. I bought this at $18.25
It appears to have found a short term support at $17.00.
Up to $17.56 earlier today.
That might have been a chance for you to sell, and cut your losses from $1.25 per share to 69 cents per share.
Then look to buy it back at $17.00 for a trade up.
If you are buying and holding then "is it going down more?" can not be answered, not even by Michael Dell himself.
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