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Strategies & Market Trends : Advanced Option Strategies

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To: Joe Waynick who wrote (61)	7/31/1998 7:00:00 AM
From: Joe Waynick	Read Replies (1) of 355

ONSL - FINAL UPDATE! Here's a good example of where traders let their emotions win over trading discipline. Clearly, I did not trade the plan. With the release of poor earnings, I tried to anticipate the direction of the stock. Then CNBC started predicting a bear market after the 200 drop in the DOW. The threads were buzzing with sell-off predictions, it just went on and on . . . I lost sight of the essence of the plan: a systematic trading system based on a mathematical model that ignores all of the "noise" of the market. Trade the swings religiously and exit only when the stk breaks out of the channel. The straddle protects the upside and downside. Rather than make a bad decision worse, I'm going to exit my put position today between $4.625 and $5. At $4.625, I will have a $5.27k profit. That's a 21% return since 07/09/98 - a 22 day hold, (348% annualized). If ONSL retreats from it's rally and continues it channel, or establishes a new one, I'll consider getting back in. Otherwise, I'll collect my profit and be happy for now.

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