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Strategies & Market Trends : Advanced Option Strategies
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To: Vol who wrote (97)8/2/1998 9:40:00 AM
From: Joe Waynick  Read Replies (1) of 355
 
Good going volunteer.

I really underestimated the emotional stress of the play. Trading discipline is the "trick" that makes a professional trader successful.

I have a sneaky suspicion that the stock will base for awhile at the 24-25 level, then resume the channel for a few more swings. My mistake was I tried to market time an already great play. Wrong move. Once the position is established, and a couple of trades are squeezed off, you can't lose any of your capital. I got too concerned with the unrealized gains and got panicky.

I've learned my lesson. If the stock goes back to 28.50, I'll get back in with a $25 straddle and resume the play. Since I'm already 5.25 points ahead, I'm still at no capital risk, unless you consider it a new play, in which case I will have capital at risk.

Questions:

1) Have you actually opened the position or are you paper trading?
2) If you think the stock will go lower, why didn't you open the straddle at $20 instead of $25?

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