Market Curiosity: Exploring Markets And Systems

January 20, 2011

Selling PHO puts due to big upside share volume +5%

Filed under: +0 to +5%, Short Puts — Tags: — Jeff Fitzmyers @ 8:50 am

Sold Feb 19 puts for $53 per option.

+ Today’s big volume at the 34 EMA support is what got me to place the trade.
+ And price today took out the previous low, rose, then took out the previous high, and closed in the upper third of the candle.
+ 5 accumulation days in the past 5 weeks.
+/- The weekly CCI is sloping down and under the monthly CCI, but the daily CCI is in the process of bouncing twice.
+ Monthly CCI rising.

Jan 20: Bought back for $0.56. +5%.
I pondered covering 2 days back and decided not to since the options were illiquid (a structural issue) and had only lost half their value (GREED). What I did not consider is “Take profits too soon in a toppy market” (the bigger picture).

– Daily CCI has a lot of room to fall if it want’s too. Better to get flat than manage underwater options.
– Price below the 34 EMA. Does not mean it will close their, just don’t want to take the chance.
– Not shown, but price was below the rising trend line.

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