Ouch. I place a limit order to cover my puts, then make it a market order as the market slides more. I get filled at a bad number and take a 250% loss on the premium amount.
Better to follow my rules, such as they are, than to hope and pray for a rebound and risk taking a game changing hit that takes years to recover from. Yes, the market may rally here, but in the first ten minutes of trading, my IBM position slipped about 80% on the premium amount. By the time I finish typing my entry here, it looks like it has rebounded all that slippage and my original limit order might have been filled. Fast markets can be death for position traders like me.
These last two trades were horrible in terms of percentage losses at 200% and 250% on the premium amount, but still relatively small in dollar amounts. For example IBM was down 8 points from my entry yesterday, the option moved 1 point. In percentage terms the one is greater than the eight, but it books as a one point loss.
Be careful out there.
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