How did I do? ( QQQ July $62 Put)

Discussion in 'Options' started by cnfuzzd, May 18, 2012.

  1. cnfuzzd

    cnfuzzd

    Hi all

    Yesterday morning, after a couple days deliberation I pulled the trigger and bought 5 contracts of the above for an average price of $2.24. I have been watching it since then with an increasingly relieved feeling, bordering on smugness. However, results-oriented thinking will only get me busted, so I wanted a quick check. How was this? It seemed like an easy move, particularly considered as just a hedge for the stocks I am holding. Was it the right move? Should I have made it earlier? Anything to do differently?

    fwiw, I am pretty sure that it is a fairly simplistic, vanilla way to go, but as I am a fairly simple person, it seemed ideal :)

    thanks!

    John
     
  2. I would have bought the June options instead. I think 2 months is too far out and you end up paying too much premium.



    :)
     
  3. cnfuzzd

    cnfuzzd

    I almost made the same decision. While I thought the move was going to happen soon, I wanted to make sure I had enough time to let the magic happen and not trying to run counter to time-decay. I had looked at August, July, and June. June "felt" too near, and the additional cost of the time-premium for the August contracts seemed to expensive compared to return, so I settled on July. How do you adjudicate this decision?

    Thanks!

    John
     

  4. It's a good decision based on your needs.


    :)
     
  5. looks like a good trade, as you say simple is good, also it is smart to go for extra time if you think the additional cost is reasonable.
    do you have a trade management, exit strategy?
     
  6. cnfuzzd

    cnfuzzd

    Yes, but not a very good one.?.?.?

    Honestly, I am definitely trying to accumulate dollars in this account as I have been allocated a certain amount by Mrs. cnfuzzd (she loves that name) and its not a lot. I will probably be to cognizant of preserving my gains (up around 45%) as this seems to be one of those gifts given by the market to lure in the unwary and give unwarranted confidence to the ignorant, which means I should definitely accept it.

    I would probably get alarmed if I saw some increasing volume with a positive close, and think it may bounce off 60 (i don't pretend thats a reasonable guess, i just like to articulate using specific numbers to try to keep myself accountable). Breaking through 60 seems like it could indicate a much more significant fall, but then I know virtually nothing about TA other than the two books I have read/am reading. With that in mind, I will most likely get spooked at some point and book some profit.

    I am such a newb....

    Thanks!

    John