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.
For EDUCATIONAL USE. Commodity Futures Trading Comission, Forex, Futures, Equity and options trading has large potential rewards, but also large potential risk and may not be suitable for everyone. You must be aware of the risks and be willing to accept them in order to invest in these markets. Do not trade with money you can not afford to lose. This is neither a solicitation nor an offer to Buy/Sell. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this document. The past performance of any trading system or methodology is not necessarily indicative of future results. All information provide d on the Blog is for educational purpose
Ichimoku Stock Option MTW: Trade Update Close 4-28-10