On Tuesday morning my March $4 calls were bid at $0.00.
Thursday afternoon my March $4 calls were bid at $.21.
Thursday afternoon I sold some of my calls for $.20 and $.21.
Friday afternoon my remaining March $4 calls were bid at $.10.
Friday afternoon I just couldn't stand it and bought some March $4 calls for $.11.
WHAT A RIDE!!
Next week should be very, very, interesting..............
(I also own June $4 calls, so no matter what happens next week, I'll be OK.)
(However, if truth be known, by the end of next week I would like to have plenty of cash and my June calls!!)
"Honestly, I expected them to expire worthless until Tuesday afternoon. I had a chance to sell them all this week, (for a substantial profit) instead I decided to wait till next week."
Personally, I would have taken it given expiration is in a week, and considered it a gift. The drop was due to profit taking for sure, but next week is option expiration week and there will be more manipulation, volatility/uncertainty, and time is not on your side (not quite the same if you own stock).
Anyway, I have said all I had to offer, and hope you didn't take offense. GL
TA= technical analysis.
Actually I learned TA way before I almost blew out my account the second time. I have good analytical skills but it was exercising disciplines and proper risk management that I failed at back then. It's easier to exit a position with a small loss. Once you allow the loss to grow too big it becomes difficult (pain) and you become a deer in the head light and will either resort to fate, or eventually bail out at the worst possible time. Worst yet, your confidence and morale shaken, self doubt takes over and you start making emotional decisions.
I never want to put myself in that position again. If you preserve your capital, you can live to fight another day.
I love something you said, and I quote:
"The market can stay irrational longer than I can stay solvent."
I have mixed emotions about holding on to my March $4 calls until expiration week. (next week) Honestly, I expected them to expire worthless until Tuesday afternoon. I had a chance to sell them all this week, (for a substantial profit) instead I decided to wait till next week. This is primarily because of today's drop in price and my belief that it was because of profit taking. I will find out next week if my actions were a mistake or not. Regardless, I realized the risk I was taking and I took it.