I got greedy and made a measly profit.

K

KINGOFSHORTS

I wrote a bunch of march calls (100 contracts) 7.50 for .99-1.03 and should have bought to close in the .30's when GE crashed under 6.00.

Rule of the Game, when you get a lucky fast profitable trade, take the money and run. This looked like a black swan event. I ended up closing at 71-78 cents. The calls are now worth 1.61. Who ever bought those 37 cent calls a few days ago made a windfall.

But I could have ended in a bad unexpected situation those calls hit high, even those strike 9 kicked it up a notch into the .50's they were only worth like 13 cents not too long ago.


I was expecting GE to do the typical new bottom and slowly creep up to 7.50.

I had a second opportunity to close in cheap in the 40's but I should have taken it as a warning when I noticed GE was outperforming the S&P during a bearish period.

I guess this was my almost LTCM event :)

I will be taking a break and re-evaluating things. This was probably too close a call.
 
I personally have a hard time doing anything with stocks under $7.50. I've just been burned too many times, and I'm just not built to respond to market events that quickly.

I mean, if you look at day's top gainers/losers by %, great majority will be stocks under $7.50.
 
I'm sure we could all do things with much more efficiency if we knew the outcomes before hand.

Goal is to develop a technique that works fairly well with most outcomes, trying to perfect all scenarios would be an impossible task.

Susana
 
Goal is to develop a technique that works fairly well with most outcomes, trying to perfect all scenarios would be an impossible task.
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I think that when a position gets nicely ahead that it's a good idea to take some money off the table or adjust the position so that a reversal dings you less. But that's just my comfort zone and isn't suited for all.
 
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