Ichimoku Stock Option MTW: Trade Update Close 4-28-10

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  • Ichimoku Stock Option MTW: Trade Update Close 4-28-10

Either you have exited 75% or 95% of your contracts two days ago.   The remaining, you left for the earnings announcement that took place after market YESTERDAY.  Earnings was not great so the stock went down at open.
At open, due to volatility, you could have gotten out at 0.50/contract which is at breakeven.   If you missed it at open then you could have closed it out at around 0.40/contract.   Now, it is around 0.35/contract.   Notice, you did not lose the value of your contract?   This is because we bought the options “cheap” when volatility was very low.   Due to earnings, volatility drastically increased which allowed the option price to have value within it even though the stock moved down.  We lost delta dollars but vega dollars allowed us to get out of breakeven on the remaining contracts we had.
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