Own shares at a price higher than current market value (unrealized loss)

Willing to forego potential profit in exchange for lowering the breakeven price point

Not willing to add additional funds to the current losing position

Instead of buying shares at the lower price to “average down”, an at-the-money (near-the-money) call option is purchased and funded by selling 2 out-of-the-money call options

2 long positions (stock and ATM or NTM call)

2 short positions (OTM calls covered by long positions)

This action will lower the breakeven price point

The strategy does not protect against additional downside loss

The strategy does cap the upside