Option Investor

BKX settlement

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BKX Index decisions. What to do! What to do!

Tomorrow is the last trading day for the BKX index which is currently $0.72 in the money on our Aug 62.50 Calls.

The current bid/ask is $1.70 - $1.90 meaning there is more than $1.00 in time value for the one trading day and the cash settlement numbers on Friday. We have a chance with this one if we can get any kind of follow through to the lows of today. If some of you are concerned we might bounce from here, you might want to lower your stop to a managable price or put in a stop around $0.20 to see if we get lucky on any pullback ( which there is no guarantee ). Of course we can just hold until tomorrow and see what the settlement numbers are and hope for the very best and a settlement number under $62.50, but then again we might get a 3-4 point run up in the index and that would be bad. That is why I say you might want to consider lowering your stop or put in a $0.20 or $0.30 stop and hope we get a test of the lows of today and get stopped out for $0.20 - $0.30 before we get a bounce. Given the volatility of this stock, you might want to do one or the other or both. Anyway if you choose to hold the position until tomorrow you will get whatever the settlement numbers come in at on Friday.

There are several ways to go here. We are standing pat and will see what tomorrow will bring.

Good luck, trade smart

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