Furrfu, when I buy my options, I have an exit price in mind.
My exit prices are based upon the resistance levels of the underlying stock in the direction I'm counting on it to move.
The QQQ has a couple of solid resistance points on the way to 40. From charts and experience the past several weeks, 43-1/2 is pretty firm, and 41-1/2 is also pretty strong too. That may not match up exactly with some charts, but there is a +/- factor that is involved too, so I take the close round numbers that seem to work.
When you have an issue like the QQQ trading in a pretty narrow range, the support levels can get pretty muddy.
There really seems to be no resistance between 43-1/2 to 44 and 45-1/2, so if we are going to touch 43-1/2 to 44, I'd expect to go lower or bounce. If we bounce, I'd sell high and buy back in lower. If no bounce, then I'd ride to the next level.
If we think support at around 40-1/2 to 41-1/2 will not be breached significantly, it provides another point to get out.
I really do not like to sell my options unless I can either make 50% and buy back near my original cost OR double my money on the original purchase. The exceptions are options that are dead or dying money or close to expiration.
Anyway, I see you bought at $2.80 and sold at $3.80. That was a good move, since we bounced from 43-3/4. You could
conceivably buy back tomorrow at $3.00 or so and sell for double your money in a week or so.
You have to be careful with the spreads. It is almost always impossible to buy at the bid and sell at the ask.
You have to nearly always buy at the ask and sell at the bid. That must enter into your decision when you sell.
Furthermore, since I can't watch everything closely during the day, I tend to buy one day and sell the next and so-on.
Because of that, I tend to hold the options a little longer when expiration is 3-4 weeks away.
Good luck tomorrow. |
