Down 45% so far pre-market! Question, do I sell my puts now, hold for more gains? I think I will sell some and wait for the price action to dictate... What ya think?
Keep in mind the difficulty of closing a put position when trading halts on a stock, be that temporary or more permanently. You do have to provide the shares to "put" when you exercise. Sometimes it's not worth the extra couple bucks at the end when you factor in your capital being held up.
That's a good point. But I'm a trader. I normally don't hold like that. My question is more about actual volatility/implied volatility and optimal exit points. I think now vol is the highest it will ever be(?? or close to it). And vol is the most important factor in option pricing. What I've learned is to sell when vol is highest not when price is lowest necessarily... My puts are already up 300% this morning! so I need to take some profits and hold some...
You're definitely thinking about options in the right way by focusing on volatility. However put options on a stock that's going to approach zero are a special case where that might not be quite as applicable. No matter the volatility, there is an upper bound on the put profit. Probably an academic discussion at this point however, because I think both max volatility and the limited upside both point to the concept that you've gotten most of the value out of this trade already. Congrats the on the win, btw!
%% Well the underlying stock is still like a red volcano....LOL barchart.com still has it a ''100% sell'' Depends on your profit already;looks like its going to $6.777, or 6.66, or zero, goose egg.Closer it gets to $5 more CA may try to squeeze the shorts ,even if it goes to goose egg, or reverse split like penny stock C did. NOT a prediction.Congrats on the trend following.
While I did really really well, the lesson I've learned is I should have bet bigger. When the fundamentals(in this case horrible) and the technical(chart looks like hell!) then I should have loaded the boat. It would have made a substantial difference and I had capital to do it too... From Market Wizard, Soros has taught me that when you have tremendous conviction on a trade, you have to go for the jugular. It takes courage to be a pig. It takes courage to ride a profit with huge leverage. Stanley Druckenmiller I could have made a serious killing today. There will be more opportunities. Lesson learned.
NO. You did what you did, and made your profits. NEVER EVER EVER go back in your mind, and on your charts, and think about the woulda' coulda' shoulda. It will DESTROY you as a trader. Trust me on that. Mmmkay?