Monday, January 10, 2011
(KMP) Put Close Out
I was short the JAN 67.50 puts at .70 and just closed them out for .10. I could lock in (.60/.70) = 85% of the profits with two weeks left until expiration so I felt this was the prudent move to make. Besides locking in profits and taking 100% of future risk off the books, I'm hoping for a pull back within this 3-month trading range so I can sell FEB 67.50 puts. If this happens its essentially a roll of the trade. Current price for FEB 67.50 puts is roughly .50. So we'll see if I get a chance for a better entry sometime in the next two weeks before JAN expiration.
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I like the new mingset on booking profits. In the past you would be talking yourself out of not closing the position because you were leaving 15% on the table...but now you are talking about how much of the total you are booking.
ReplyDeleteInteresting for sure, nothing has changed other than my perception.
ReplyDeleteJason, Do you have a particular watchlist, Sector, or Industry Group that you trade? How do you go about finding your particular trade candidates?
ReplyDeleteHi Darrin, sorry for the late response. I was in the mountains and didn't have Internet access for a few days. I do have a watch list of sorts but the ticker symbols on it change all the time. They are mostly things I've traded in the past and thus am familiar with their charts. I do not watch individual sectors or industries.
ReplyDeleteThe question about finding trade candidates is a good one. I often ask myself that, I don't have a particular formula. It's kind of an amalgamation of scouring websites, blogs, TV, Twitter, and charts from my watch list, etc. I often find other people's trade ideas and I analyze them from my perspective. I rarely use their exact trade but rather end up finding another angle to play it that I like better. I hope this helps, let me know if you have any more questions.
Jason