Welp, I finally bought my first option. And boy did I botch this one. Last Friday I took a chance on a Microsoft $425 put that expired today(7/26) I paid $155 for 1 contract that got filled at open. Late Friday it was up to $210 and I thought about taking the profit then as I didn't see the continued downtrend I was hoping for.
So Monday comes and I'm thinking let me just cut my losses. I try to sell at $82 and my app said successful, so I went back to sleep, when I woke up it apparently didnt go through at that price and now had fallen to under $50, I sold at $48 for a net loss of $107. Well, things sure took a turn quickly the last couple days. Msft at $418 now would have put me up over $500.
Obviously in hindsight, being such a low amount to begin with, I should have just let it ride. But what if it were 100x , what's the strategy to cut losses?
I do think I am starting to figure out the overall market, every time my account gets over 30% there is always a big pull back the following week. So ill let you guys know the next time its about to happen. Could be a while though.
