The One That Got Away

Today, Lehman reported and came in with the loss they had previously announced, which was apparently positive for them and the rest of the financials. GS reports Tuesday and if it also has a good report I think there could be an ease in the credit fears and the market could move back higher. GS actually broke and finished above 180, which would have signaled me to get long some calls but with earnings coming I don't want to gamble since I am currently down. I was positioned bearish ahead of LEH's report on LEH, GS and MS. All had rallied recently and I thought if there was any kind of news not already out it could take them back down. That did not happen and I cut my losses shortly after the open. This proved to be very smart because GS then moved up 7 points after at its peak and both MS and LEH moved 4%+ on the day which would have killed my calls.

The largest disappointment was missing the trade on AAPL, and when I say missing I mean I took the trade but didn't get filled. My bid was 1.75 and AAPL was following a nice trendline and I assumed a retest and I would have gotten filled, but no the ask was 1.78 and it then broke out. My order was for 25 contracts. The stock moved and I assumed if we could break above the previous close we could get to 175, which was precisely what happened(actually closed above 176), so my option when I checked it again was worth 4.65. Had I paid up an extra 3 cents I could have been up an extra 7k in a single day and trade without having risked more than 2%. The frustrating thing is more so missing the extra capital, had I made 7k I could take 14 more losses before I was back to where I started and in that time I should hit one or two more big trades like that. The comment was made that "those things happen every day" meaning the stocks move like that every day, which is true but the likelihood of me getting in like I could have and getting a return like that does not happen every day. Who knows, maybe it could happen again tomorrow and I am in the trade, however the odds are not in my favor. Speaking of which I have to work tomorrow for most of the day so I probably won't be in any trade.

I have to look forward, that sucked and I am sure it will happen again but I am glad I cut my losses, that is half of it. The other half is taking advantage of those large winners and being along for the ride.