Mike Khouw Advises Viewer On Nucor

On CNBC's "Options Action," Mike Khouw advised a viewer who bought the October $100 calls in Nucor Corporation NUE how to proceed with the position. He initiated the trade when the stock was trading at $79, so it has done very well since the purchase, even after the recent decline in Nucor.

Khouw said that he usually looks at the options delta in situations like this one. If delta reaches 0.6 or higher, Khouw would adjust the position by rolling the option up.

He wouldn't change the expiration because there is still a lot of time left. Khouw added that the viewer should consider selling calls with a higher strike and shorter expiry against the position if he feels that gains are going to be more modest than we have seen so far.