Well, a little update on the positions.
AAPL Nov 170 calls +1,375 (good)
GOOG Nov 640 calls -90 (eh, took a 6 dollar move over where i bought at to get back to about even)
FCX Nov 120 calls -1,100 (Terrible)
Ok, so as we can see, 2/3 somewhat working out, however FCX is down 1,100, which is over my 2% risk I want to limit losses to.
As we went into the close there was a rally, which was good, I spent the last hour before close in the car though, at the the time I was down about 850 on the call, just over my limit but it still wasn't the end of the day.
So here comes the dilemma, I got into FCX at 115, wanting to play the momentum going into earnings I was giving it a 2% loss forgiveness. So now, I am sitting at almost a 3% loss, however, FCX has not broken recent support at 110, in the meantime my call loses time value and volatility. So what do I do? Hold until it breaks 110 and possibly lose more than even the 3% I have already lost? Or sell out now and assume it continues down but limit my loss to only 3%.
I have yet to decide, what I should have done in retro spect is wait for a pull back to this support level and then get in, so there is a learning experience. I am less inclined to sell because the actual trend hasn't technically broken combined with stocks normally going up before earnings, but I am losing more than my wanted 2%.
The good news is I am up 150 over when I started the positions, however I would be 300 richer had I cut the loss exactly at 2%.
I'll see how the day shapes up tomorrow. If anyone has input on suggestions that has more experience let me know.
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2 comments:
Ben, I know you asked for input from someone with more experience... unfortunately, you got me! :) I've only been trading since June...
I'm not in FCX, so no emotion here. I have a horizontal line drawn in on ProphetCharts right at $113.45. Recent opens/closes seem to move around it... perhaps earnings could be the catalyst to either push it above or below for good. Your decision comes to this: if you hold over earnings and the stock moves against you, can you live with that? I mean, it seems that you've already exceeded your maximum threshold for loss. On the other hand, even if the trade goes against you, there may be a spike in volatility that'll coushin (sp?) you.
Do you feel that emotions crept in to this trade? Are you rationalizing? I did that with NILE.
Ugh, sometimes these trading decisions can be so tough when the stock is just flirting with your line in the sand and not breaking it or bouncing off of it decisively. I'll check back to see how things play out for you...
Krystal, I don't feel emotions got in, I was just torn between going off technical charts with my support being at 110, realizing my entry point was a little pre mature, or going off my logic knowing that I need to keep losses limited if I want a chance of succeeding in the long run as well as keeping consistency.
I appreciate the input, we'll see how it plays out.
Ben
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