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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: January 29, 2016

QUESTION:
Is it possible to turn a losing trade, such as a long call, into a winning trade or at least cut some of the losses from a losing trade?

ANSWER:
An option repair strategy in some cases may help improve the chances of getting out of a losing trade with a small profit. The goal of this strategy is to make back some or most of the unrealized losses incurred when a purchased option goes against you. To learn more about the option repair strategy with an example using one February 75 Call, view this segment of "Ask the Institute."