I lost 25% in this stock in 6 months with a long position and tomorrow I will initiate a new position. I love the company and hate the stock and I know it will move drastically in the next month but I have no idea which direction! My instinct says it will drop to single digits but I have been burned before. So, after researching option spreads, the March premiums look exceptionally low considering the volatility we will likely see soon. With that said, I am buying a long strangle tomorrow with significant cash.
The most success I have had with this strategy is when I move into a profit on one side of the trade (for the total investment) and then it moves in the other direction because it was all rumor. For BBY, I will need to hit 17.50 or 12.50 to make a profit by the 3rd Friday in March. I like the potential here!!! GLTA.