You can read charts until your blue in the face. I have learned through my 13 years that when the trader intuition is alarming you that you have seen this before many times to go with it and play the percentage in your favor. The 3 day margin rule is one of my favorite setups. Works 80% of the time with a large 4th day gap. You can use it if you want. Consider it a freebie.
You think that arrogance will get you anywhere? Using your "intuition" to trade only takes you so far. No offense, but this was about as risky as it gets. You rode the tail of the traders who knew what they were doing friday. You were expecting a bounce, but you bought June calls?! Obviously buying "time" means you didn't have much confidence in this trade. At the VERY best you simply didn't understand the mechanics of it. Not only that but you scalped it out for 24%? Seriously? The sad part is you didn't even understand what your risk was.
A couple of questions for my own edjamacation... 1) Why did you pick the June calls over May? Would you have exited or sold a spread to hedge yourself if SLV started ranging this week? 2) If my calcs are correct, you had somewhere in the neighborhood of 200+ contracts. What is the reason for exiting all at once? The timing of the call was interesting, I'm just trying to understand the execution. Thanks,
It's hard to understand, because he doesn't know what he's doing. He bought June because he was flat out gambling and looking for TIME to protect his ass. Yeah a vertical spread would have made MUCH more sense imo. He's lucky it bottomed Friday or he would have been toast
Why June calls instead of May calls for a trade that is to last a few days? May 36.00 calls up 80%, June 36.00 up only 50% from Fridays close. That is a significant amount of lost profit for no apparent reason. Looking forward to your reply.
So how did this play out, roughly what was the % return on the options premium from your entry to exit? Did you buy any more on Friday as silver dipped to 34 then 33?
My guess is that he sold at about $3.00 based on the timestamp - 09:43 AM - of his post stating the position has been closed http://www.elitetrader.com/vb/showthread.php?s=&postid=3178954#post3178954 Buy @ $2.25 Sell @ $3.00 % return = 35% Commissions not included. I believe he was all in at this point.