Quote from poland:
Dear TO,
1) Did you make your purchase near end of day of 25 June?
If yes, why?? wouldn't the risk be higher
yes..the risk is limited as buying call option..can not lose more than payed..and can lose less if early exit before expiry
2) on a larger time frame, the lowest point is somewhere in May 125XX
Why do you enter long now....because it looks sliding down...
wouldn't it be a better bet to wait for the price to move up to 330 before going long??
Or on a bigger time frame...wait for price to hit 420??
u never know what will happen next..in hindsight the index price dropped the next day after a brief rally..but it could have easily kept going up..as with any other major index
3) What is your stop limit? And why don't you use trailing stop?
it is a long call..the stop is not required as delta is not 1..so premium price move will be % of index price move
4) Have you considering exit at around 320 on 26th June 1330hrs?
Because I see the price try to move up twice. Once in the morning and then noon time....If this is the case, doesn't it tell us that price try to move up but each tie got sold down...so maybe it will hit downwards??
yes..but i held this trade as an example..could have made 40 pts the following morning if closed at 340 when index rallied
5) do you set a time limit to exit the trade in a fixed number of days?? because each day beside the market price volatility....option premium is also reducing as time is near to expiry??
it is like a double risk??
it all depends on what happens to the index price..if it dropped..like it did..then i might buy some more calls..which i did..some with this week expiry for lower risk...but also less gain if index moves back up..it is all about taking risk and controlling it..no risk..no reward
see picture below of one i closed today.
