I fold on my APC position, buying back both ends of a short strangle APC@76.8:
cover short APC Apr 75 puts
cover short APC Apr 87.5 calls
I am now totally out of APC.
When I found APC, I thought Anadarko Petroleum was going to be one of my “milk cows” for the year with a steady stream of monthly or bi-monthly profits. Instead, I take about a 75% loss, using the premium from selling the options as the basis.
It hurts to cover short puts on a sharp down day. It can hurt a lot more if the short put options go into the money and downside delta explodes. There is minor chart support at current levels, and APC is oversold, but another 10% down to 70 would not be a shocker and turn an ugly trading loss into a monster loss. As almost always with my trades, percentage gains and losses on option trades can be eye-popping, but I tend to keep position sizes and dollar amounts small.
Long AXP IBM LGF SLV SPY XRT
net long GLD IWM
No comments:
Post a Comment