I just got a fill on the PSNL call. How do you determine what's the best price to exit the remaining call? Do you wait until the week of expiration, or do you monitor the price regularly up to expiration?
What I've started doing (including in my most recent chat thread) is using the ATM straddle to estimate an upper bound for the stock before expiration, and then using Black-Scholes to estimate a price for the option if the stock hit that upper bound midway between now and expiration. For PSNL, that number would be about $6.75 now. Then, as we get closer to expiration, you can lower that if necessary.
I just got a fill on the PSNL call. How do you determine what's the best price to exit the remaining call? Do you wait until the week of expiration, or do you monitor the price regularly up to expiration?
What I've started doing (including in my most recent chat thread) is using the ATM straddle to estimate an upper bound for the stock before expiration, and then using Black-Scholes to estimate a price for the option if the stock hit that upper bound midway between now and expiration. For PSNL, that number would be about $6.75 now. Then, as we get closer to expiration, you can lower that if necessary.