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system
strategies to recover from a bad short-term call options purchase where the underlying dropped instead?
user
the nature of options requires you to understand that they are essentially a bet. in one sense, so is investing in stocks. we imagine a bell curve (first mistake) with a median return at 10%/yr and a standard deviation of about 14%. then we say that odds are that over some period of time a monte-carlo simulation can give us the picture of the likely returns.  now, when you buy short term options, say one month or so, you are hoping the outcome is a rise in price that will yield some pretty high return, right?  there was a time i noticed a particular stock would move a large percent based on earnings. and earnings were a day before options expiration. so i'd buy the call that was just out of the money and if the surprise was up, i'd make 3-4x my money. but i was always prepared to lose it all and often did. i never called this investing.  i know of no recovery strategy. sorry.
assistant