keep thinking that way and buying front month OTMs options when you do-- and then see how it goes for the next 6 months. IF you really have conviction about CECO "having to" retrace based upon "profit taking" why not buy some deep ITM puts - only in smaller size? At least if you are 'correct' about "profit taking" you will realize some profit!
well, I'll be the first to admit, I have some distance to travel before I arrive at a profitable strategy that works consistently over time. In time, I'll need to adopt more of a long term approach like the one your suggesting. So I appreciate the suggestion. At the moment, I'm simply trying to find low-risk trades that I can watch which will allow me to continue to feel-out the markets. I thought I'd risk $500 dollars to make $2100, not particularly intersted in watching this company for more than 5 days... The SEC dropped an investigation (the instigation barely caused a ripple in the price) and it was upgraded to Mkt Perform from Under Perform. It ran up 15% today, I think that was excessive. Look at a 3 year chart on this sucker, it's a bit of a laggard. 42 seems to be its resistance to boot... So my thinking goes anyway ,...
I think it could trade back down to gap support - maybe - but that may not be enough bang for the buck on front month OTM puts. IMHO. So unless you think it will "fill" the gap - i.e. that it is not a breakaway that preages higher levels first--- ITM puts is the way best way to trade your premise as stated in your first post! b.t.w why do you view OTM front month puts as "low risk" -- if I get your drift correctly as stated above? Do you actually mean "low cost"?!
Unfortunately, profit potential is directly proportional to risk in this business. You could buy OTM options but make sure you allow the underlying enough time to move, so '60-90 days' out is recommended.
Thanks for correcting me... LOW-COST, not low risk. 15 contracts, for $900 bucks is bargain-basement... $500 is not much to lose. Well, I'll show my inexperience by admitting that I am not familiar with "Gap Support". My thinking was/is far less abstract. The news was not good enough to justifya 15% gain. Although half of the 8million exchanged shares today probably disagree. If it gives back 1/3 of that gain, I make 3x the money. The most I can lose is $500.
taking a quick glance at the chart it looks like CECO broke out of a large triangle that has been forming since '04. It could indeed sell-off in order to re-test <40, or keep going and re-test at a later date. The "gap " today is not that large, and CECO is a volatile stock; but it looks like a breakaway/pattern gap for sure - so read up on whether those are likely to 'fill" forthwith. sounds to me like you have a clear plan and a basis therefor; thus you should not let anyone influence your decision to execute it. bonne chance
SNDK and LCAV positions are likely to be closed this week. Will love to see LCAV back to 50 or 51 today for 4K+ profits....will update!
Update: BTO: 3 SNDK May 62.50 Call @ $2.65 each STC: 3 SNDK May 62.50 Call @ $5.70 each Profit: $915.00 BTO: 8 contracts of April SNDK 55 Call @ $5.80 each STC: 8 SNDK April 55 Call @ $9.50 each Profit: $2,960.00 I'm holding 25 LCAV June 50 Call bought @ 2.55