I trade size I can tolerate, a stop will trail when needed. When Globex opens I reconsider everything.
I spent some of my gain from past two weeks to buy some Jan 1.4 puts right before close. Also exit from the puts spread. Because it was put spread, I did not fully capture those 250 point drop.
So you're a proper Euro Bear now? From selling puts to buying 1.4 puts? lol I hope you're right buddy, cuz I'm looking at a bearish put spread as well on the Euro. How are you trading it?
From hindsight, I should have initiated outright long puts instead of puts spread on Wednesday. Initiating a put spread on Friday is a better trade than outright long put. Now I only have long puts left in my position. The time decay is about $33 per contract now and $77 ten days later. Based on the options lab's calculation, anytime before or on Jan 1, 2010, if Euro ever touches 1.41, I am going to make 50% from my position, regardless time decay. If Euro drops to 1.4, I will at least make 100%. As of iv, when euro drops, the iv at least won't drop, if not go up a little bit, for the past two weeks, the iv for put has been fluatuating between 9.0% and 12%.