Comments on: Calling the Top! http://www.tasgall.com/2006/10/18/calling-the-top/ Peering into the Cauldron of the Gods... Fri, 27 Aug 2010 09:05:17 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: Jason G. http://www.tasgall.com/2006/10/18/calling-the-top/comment-page-1/#comment-229 Jason G. Sat, 11 Nov 2006 15:59:00 +0000 http://www.tasgall.com/2006/10/18/calling-the-top/#comment-229 Incidentally, I sold on Wednesday this week for a 25% gain. Not exactly a stellar return, but it was positive. When I trade an option like this where I consider the position to be at 100% risk of loss, I really prefer to have a 200 or 300% return on the upside to justify the risk. While holding the calls, I watched the value fluctuate from my entry at $3.60, down to $2 (possibly a little less), all the way up to $5.20, and back down to $4.50 when I sold it. With a very short-term position like this, it's all about the timing. Had I been able to buy in the $2 range and sell in the $5 range, I would have more than quintupled my return (instead of up 25% I could have been up 125% or more). With the elections over, I'm happy to stand aside for a few days/weeks on the indexes and see if they decide to change direction. I still have directional bets on individual sectors and stocks that should benefit if the market continues to rally. Incidentally, I sold on Wednesday this week for a 25% gain. Not exactly a stellar return, but it was positive. When I trade an option like this where I consider the position to be at 100% risk of loss, I really prefer to have a 200 or 300% return on the upside to justify the risk.

While holding the calls, I watched the value fluctuate from my entry at $3.60, down to $2 (possibly a little less), all the way up to $5.20, and back down to $4.50 when I sold it.

With a very short-term position like this, it’s all about the timing. Had I been able to buy in the $2 range and sell in the $5 range, I would have more than quintupled my return (instead of up 25% I could have been up 125% or more).

With the elections over, I’m happy to stand aside for a few days/weeks on the indexes and see if they decide to change direction. I still have directional bets on individual sectors and stocks that should benefit if the market continues to rally.

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