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Welcome to your source for answers to questions about option concepts, strategies, and terminology. A new question and answer is published each week. To view the Ask the Institute archives, click the "Ask the Institute Archive" link below.

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This week's question:

DATE: February 27, 2015

QUESTION:
Is there a strategy that, in some instances, may help improve the chances of getting out of a losing trade with a small profit?

ANSWER:
There is a strategy, known as the option repair strategy, when employed has a goal to make back some or most of the unrealized losses incurred when a purchased option goes against you and becomes a losing trade. To learn more about the option repair strategy, including hypothetical examples, view this segment of "Ask the Institute."

  VIX Snapshot

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