Friday, November 20, 2015

Weekly: Bush-whacked again

Two stop losses triggered near the worst levels, ruining my trading week. CMG and EXPE dipped then rallied. The dip taking some positions at near the worst levels. As I often write, this will happen to any trader that uses stop losses, or mental stops. The alternatives are not to use stops, or perhaps use time related stops. A few will even double down on losers. My schedule hasn't left all that much time for stock or option trading or blog updates. I'll do what I can but I few posts may be a day or two late.

Here are the trades from my sour week of trading (c = calls, p = puts, sell means sell-to-open, cover means buy-to-close, weeklies denoted by w suffix, NovW4 would be November week 4, all others are third week expiration)

Mon 11/16/15 Sell FB Nov 108 c 19
Sell EXPE Nov 130 c 28

Sell MCD Dec 95 p 32
Sell AMZN Dec 740 c 94

Tue Sell FB Dec 95 p 58
Sell V Dec 70 p 22

Two options cross their strike price and that is my mental stop. I get out for huge percentage losses:

Cover EXPE Nov 120 p 104 about a 300% loss
Cover CMG Nov 580 p 603 about a 600% loss. Ouch!

Sure I could hold and hope, but my trading plan is to cover if the sold option crosses over strike price. The most pain cases are when the stock immediately reverses. That ugly and painful scenario has happened more times than I want to think about.

Wed Sell FB DecW1 100 p 39

Thu Sell AMZN Dec 570 p 233
Sell NKE Dec 110 p 60

Fri Sell AAPL Dec 100 p 23

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