Tuesday, August 7, 2012

UA - Sell

Sold the UA August $55 calls for $3.40 at 11:54am August 7, 2012.  The purchase was described here.

The gains for this transaction were $2.30/contract or 209.1%.  This trade went exactly as planned.  There exists the possibility that these contracts will continue to run higher, but the odds were not great enough that it was worth violating my exit plan.  The underlying stock touched above $58 today, which as I explained in the purchase piece was where I thought it would go.  The stock has made quite the run over the last couple of days becoming a little over-extended.  The greater probability over the next couple of days is for sideways, possibly corrective price movement.  Given the time-sensitive nature of options, the time to exit was now.

I would rate myself 9/10 on this particular trade.  I followed my position sizing guidelines and obeyed my risk rules.  I had sound reasoning for my entry and nailed the exit.  There is a small chance that I left money on the table, however I am completely satisfied with a three-bagger.

This material is provided for informational purposes only, as of the date hereof and is subject to change without notice.  This material may not be suitable for all investors and is not intended to be an offer, a solicitation of any offer to buy or sell any securities.  Following me in trades will lose you money.

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