You mean 10 puts. I agreed with your timing, but the prices for all gold related options were absurd, so I was not motivated to pull the trigger. Was waiting for volatility premium to cool off but it never happened.
I know I am not a big player like some of you guys. I know this is one of FF's "dinner at Red Lobster hangs in the balance" trades. My point is, if you are going to get in and out quickly, what difference does it make if the price of the option is inflated. I entered this trade at 8:52 this morning and exited at 9:03. I swing trade GLD once in awhile when I THINK I have a sense of what it is going to do. When I enter one of these trades my thought process is if I lose $50 I get out, if I make $100 I get out. Looks like the wife and I will be dining at Red Lobster tonite. BOT +1 GLD 100 SEP 11 185 PUT @10.90 SOLD -1 GLD 100 SEP 11 185 PUT @11.90
I'm not a big player and nowhere near an options expert but it's just the simple concept of pricing options. You can get too much price erosion just from implied volatility contracting, which for Gold was so high. On top of it, even with vol that high, prices were still a bit high from buying interest. If your timing is that good, it would not matter but had this move stalled for a week, it would have made you think twice. I was debating buying puts for a week on Gold but did not want to at these levels. Learned my lesson from buying options when they are hot & volatility is high. Over a number of trades it just does not work out. Missed this move but I'm actually more interested in getting back in on the long side. I would like to see Gold go below $1700.
I completely agree. I haven't being buying options, other than spreads, for a couple of weeks. The swing trade was the exception. Should have stayed in it a tad longer as it turns out. ETA: And I see you have been here since 2004 so you are MUCH closer to being an expert than I am.
obviously should have kept half and let it run longer. expect this put in the money next week. probably a potential 10x.