Not at the moment, Sam - that was more "target of opportunity" cash. I felt the fast move to/over 50 was strange, based on the general sentiment about the earnings report, other tech weakness, move above max-pain, etc. The thread's reaction of "no comprende" entered as well. It seemed like AMAT ran up irrationally, and it might recoil for the same non-reason. JS's note was added confirmation - he's better at downside-guessing than I am.
So - the climate existed for a down move. Feb options had nearly expired, so the time premium was basically gone. A sufficient down move would take AMAT below the max-pain point (where my gut tells me it "should" be right now), driving the 47.5's slightly in the money.
I took very much a "swing for the bleachers" risky SWAG, half expecting to strike out (as before, occasionally). This time, I dinged the scoreboard. I don't expect the same volatility/ROI conditions to exist until the week before March options. This was a "double-or-nothing" situation that paid off more than double.
-- A note on mentality - I have an optimistic LTBH approach most times. I'm calibrating my instincts (with small $) about how to spot downside movement so that I can preserve the bigger $. About twice this last month, with AMAT over 50, I sold some covered calls at 50 and 55 in my IRA. I closed them at about 45 (on the way to 42), netting about 80% ROI.
Of course, as soon as I get good at short-term cycle-spotting, the durned thing will hit an upside zig while I wait for the zag ... <g>
- Mitch (reminding myself about broken clocks ...) |
