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  • crewcoachmickey1 crewcoachmickey1 Sep 13, 2013 11:03 PM Flag

    Wow, another week of amazing luck

    Started buying weekly 250 puts at $2+. The stock kept going up. In retrospect, it really wasnt a good idea but I kept buying puts to average down. Before I know it, I have 120 contracts with avg cost basis of $0.80. Current price now trading at around $0.60. At this point, I'm really getting nervous, it's now already 12:15pm EST and options are starting to be out of the money. All of a sudden, stock starts dropping. I set the ask price to $1.20. Other ask prices going up to $1.35 but I hold my ground. It took a couple of sudden purchases before my shares get sold. Short time later, stock starts going back up and puts are below the price I sold at. This was just so amazing.. I was really lucky to get out of this without getting hammered. At that point, all I knew was that I needed to dump the puts. I had way too many contracts and LNKD is not a stock to be messed with when it's not trending well. The price jumps around unpredictably. I need to avoid doing this. I usually try to day trade only stocks that are trending due to some news. One other lucky thing is that I avoided buying puts on TSLA. I've gotten burned too many times lately.

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    • The first rule of options is:

      You make money SELLING them, not buying them.

      When tempted to buy options please refer to the above first rule. I learned this very young (in the early 80's), when options first started. Long before the Internet, I walked into a brokerage in Palm Beach and all these really wealthy guys sat around all day checking quotation terminals and tallying up their profits. In a rising market like we've had, they just kept selling puts. Now you can even sell em by the week. Just make sure that it's something you wouldn't mind owning, like the SPY.

210.04-2.34(-1.10%)Sep 17 4:00 PMEDT

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