For a stock that has lost 45% of its value, there is no zero cost option strategy that can be utilized to recover such a loss. With a fair amount of luck, you might be able to recover a chunk of the loss if the stock cooperated, but they rarely do.
For a stock that has dropped maybe 10-20 per cent, you can use a Repair Strategy to recover losses. For every 100 shares that you own, execute a 1x2 Ratio Spread (buy one call at a lower strike and sell two calls at a higher strike. The combined position will be equivalent to a covered call and a bullish vertical call spread. All short calls are covered.
The premium of the higher strike call should be at least 1/2 the cost of the lower strike so that the Ratio Spread costs nothing. A credit is even better. If the Repair does not work out, you'll have the same downside potential as if you had done nothing, namely just holding the stock and hoping for a recovery. To the downside, a failed no cost Repair has no impact on the overall position.
To achieve break even, if using an ATM long call, the short strike should be approximately midway between the current price and your break even price. IOW, the width of the vertical spread (the difference in strikes) should be about 1/2 the amount of your paper loss for you to break even.
There are two subtle points but they are merely underpinnings.
(1) Dividends inflate put premiums and deflate call premiums. This has a greater effect on options closer to the money which makes a Repair more expensive, relatively speaking.
(2) Implied volatility also affects the price of a Repair. The lower the implied volatility, the more costly a Repair will be. The higher the implied volatility, the larger the available credit which may then enable you to use lower strike prices which means a higher probability of the upper strike being reached and the Repair succeeding. So in the magical world of dumb luck trading, any news event that moves implied volatility up (and not price down) would present a better Repair opportunity.
Do you need to understand these underpinnings? Not really. All you need do is look at the option chain and see if a viable Repair exists. Go out a week (or month) at a time to see if an option pairing meets the no cost requirement. You want the closest expiration possible that provides a no cost Repair and break even. These criteria are not etched in stone. If you want to pay a small premium for the Repair or if you want to shoot for a price less than break even, go for it.
You DO NOT want to go out many months with a Repair because prior to expiration, short calls retain time premium and they will be a drag on the long call gain, hindering the Repair from achieving its full value prior to expiration. To get the maximum amount from the Repair at expiration, the underlying would have to be at or above the upper strike. To get the maximum amount from the Repair prior to expiration, the underlying would have to be well above the upper strike in order to drive the short calls to parity (no time premium remaining).
An increase in implied volatility prior to expiration will also diminish your ability to break even. For example, if you executed a no cost 6 month $22/$26 Repair and it rose to $26 in one month with an IV increase, you might realize only 1/2 to 2/3 of the Repair's maximum profit. If it then dropped - Poof! - you'd have nothing to show for your effort. In such a scenario, parity might be in the $32+ area.
You can also use this strategy for brand new stock purchase. This is not a Repair since you aren't underwater (paper loss). For example, if XYZ is $70, if you could execute a $70/75 ratio combo for no cost and if XYZ was above $75 at expiration, you'd net $80. From $70 to $75 you would make $2 for every dollar that XYZ rose ($1 on the stock and $1 on the long call). So at $71 at expiration, you'd net $2. At $72 you net $4, all the up to $75 where you'd net $10.
I tend to close Repairs when they have achieved 80% of the potential gain and then either add a new Repair at higher strike prices or perhaps shift over to writing covered calls since the premiums available might then be more acceptable.
You can read more about this at: http://www.cboe.com/strategies/advanced/equity/stock-repairs-strategy/part1